Treason is the Reason

Some of us may already know this but i'll just go ahead articulating what i know and feel about this topic. Kindly forgive me in advance should I trespass on your beliefs should you know better.

So in Singapore theres something that befuddles me. Why the need to have 2.5% CPF interest rate returns and then have housing loans @ 2.6% interest? Why not just make it 0.0% CPF interest rates and 0.1% housing loans instead? $100,000 loan means $100 a year if its @ 0.1%.

0.1% interest per year? Thats fine. but 2.6% isn't.
Let's digest this in increments of $100,000.

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By simple number pattern logic:
The 1st year's cumulative payment of your interest is about $2,600.
The 30th year's cumulative interest is almost $0.
So, 1st + 30th = $ 2,600

Since the 2nd year, you pay slightly below $2,600 (its around $2513.33)
and the 29th year you pay slightly more than $0 (its around $86.67)
their cumulative total is also around $2,600
So, 2nd + 29th = $2,600

We soon notice that every pair of years is around 2.6% of unavoidable interest recognized by the lending body (in this case, the government) as 'profit'. (More on this later)

So, for the duration of a 30 year loan, we have about 15 'pairs' of years.
That works out to be 15 x 2.6% = 39% interest.

For ease of calculation i shall just use 40%.
(once you add your housing insurance and what not, trust me you aren't far, and i have yet to include conservancy fees to the equation, i will speak more on this soon)
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For the next few examples, i will use simpler math and more conservation approximations.
Yes, I am fully aware some of you will be able to pick out that i left out:
Wage increments over time (I prefer conservative estimates and will not hedge against the future)
Fixed housing costs (I prefer a general assessment of today's figures over prospective years)
Inflation (I shall bravely anticipate inflationary prices over time to neutralise wage increments)

So in short, if you:
borrow 100k , you pay 140k and bleed 40k interest over 30 years.
borrow, 200k, you pay 280k and bleed 80k interest over 30 years.
borrow 300k, you pay 420k and bleed 120k interest over 30 years.
borrow 400k, you pay 560k and bleed 160k interest over 30 years.
borrow 500k, you pay 700k and bleed 200k interest over 30 years.

This doesn't make sense to me whatsoever.

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In the first place, 'public' housing, should not be pegged to 'open' market prices (in addition, property speculation of PUBLIC housing should not be encouraged the slightest bit for its inflative bubble, when endorsed, is difficult to undo) and becomes sensitive as sensitive issues come, when you inculcate a mentality of said property appreciation/speculation, see.

When the cost to build a public apartment is between 100k-150k, i believe what should be done, is to charge that, and that alone. That can easily be achieved by a working couple within 10 short years. No more interest gnawing and culling value from those who need that value to be some place else instead of ending up as an attrition of value, tis such a waste, really.
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If a couple, together, take home 60k a year, current CPF rate of 20% employee contribution makes this annual figure $12,000. Given that what the employer contributes (15% as of now and more to come soon) more or less goes into Medisave Account (MA) and Special Account (SA), i will consider an employee's own contribution to primarily pay for the housing loan.

This way,
100k will take around: 100k / 12k = 8 years 4 months.
120k will take around: 120k / 12k = 10 years.
150k will take around: 150k / 12k = 12 years 6 months.

And thats it. You're done paying for accommodation, time to spend all those other aspects of value on things that are important, like self development, and having a resource cache for the raising of good quality children. (Yes kids are expensive nowadays, i will write in time to come about this)

Some of you are beginning to wonder about how the government could afford to build your current accommodations. And that's a good question. I do not know this myself, but i have a good hunch that it is off the very same CPF monies and interest rates that the generation before us has accrued them. So the position i am taking here is this:

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If you've already made your money slowly but surely through housing, then its time to get to the social equity part of the deal that you as government is elected the sole purpose for, and not run autopilot capitalism and drive the rest of us into the ground with you and fall back on whatever ninja immunities you legislate yourselves in having so as to evade accountability. This much you owe the people.

I can only associate any other deviation from honorable intentions to help the people, for the sake of making a quick buck (or slow and painful and poisonous buck, if you will) from your people to be treacherous treason.

So you build 1 floor with 10 units @ 150k/unit, and allow them to be sold for 350k each.
1 floor = 10 x 350k = 3.5 Million.
20 floors = 70 Million.

Yes the money doesn't entirely go to the governemt, this i understand.
But you're playing devil's advocate charging 2.6% per annum on that 70 million that exchanges hands.
Over 30 years, your return on that 70 million is 40%. that to you is 'making' 28 million in profit.
That to the couples who need housing and monies rightly theirs, for starting the families you charge them to have, is robbery!

Should I add the profit made instantaneously so as to coerce couples to take huge loans in order to procure themselves accommodation, then its $200k profit per unit.
1 floor = $2 Million profit.
20 floors = $40 Million profit.

So you have 1000 of such blocks made because you think this makes you fast cash:
1 block = $40 million profit
1000 blocks = $40,000 million profit = $40 billion.

Total sum of interest accrued and considered as 'profit' if:
everyone takes a 10 year loan = 5 x 2.6 = 13% return = $5.2 Billion
everyone takes a 20 year loan = 10 x 2.6 = 26% return = $10.4 Billion
everyone takes a 30 year loan = 15 x 2.6 = 39% return = $15.6 Billion

Trickle economics at its worst, i say.
how many people can 1000 blocks made this way, house?

5(people/household) x 10(units per floor) x 20(floors) x 1000(blocks) =
200,000 couples or 1,000,000 people

So, potentially, our next $45-55 Billion in unjustly created 'profits' from retailing housing, this 'wealth' is coming from increasing population, and its no wonder why government conveniently thinks that way. How dark the con of man.

with 200,000 working couples earning $50k per household, collecting $10k per year:
in 30 years, you collect 300k in CPF monies per household.
200,000 households = $60 billion in CPF.

So the next 105-115 Billion over the next 30 years has already been made. you're fully in team 'Treason' now. Governance becomes easy. Blame the people for not having children, import more foreign labour. Try as best you can to change your cash inflow and deter the outflow by playing with peggings and once again hedging against your own citizenry. Q.E.D, right?

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Time to audit Public Housing I say, and not a moment too soon!
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Think for a second, isn't this what we now have?
150k apartments sold for 300k / 400k / 500k. Why the need to push up prices? This is why.
we could have the next generation happily sowing the firm foundations of the greater future but instead they are mired in debt due to unnecessary inflated prices that make you unwillingly COMMIT to then paying even more INTEREST on. Total allocation of resource failure imo.

The cost savings of charging at cost is tremendous:
(this, I reiterate, should already be the status quo but isn't)

So, for a unit sold @:
200k : Savings =  50k (direct profit) + 80k (interest on 300k over 30yrs) = 130k saved.
300k : Savings = 150k (direct profit) + 120k (interest on 300k over 30yrs) = 270k saved.
400k : Savings = 250k (direct profit) + 160k (interest on 400k over 30yrs) = 410k saved.
500k : Savings = 350k (direct profit) + 200k (interest on 400k over 30yrs) = 550k saved.

Presuming that 1 parent earns around 30k / year, that would translate to:

200k : 130k saved / 30k = 4 years 4 months of prospective wage needing to be earned.
300k : 270k saved / 30k = 9 years 0 months of prospective wage needing to be earned.
400k : 410k saved / 30k = 13 years 8 months of prospective wage needing to be earned.
500k : 550k saved / 30k = 18 years 4 months of prospective wage needing to be earned.

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If we're as hyped up about increasing population, then we should be making it as scalable for couples as we can to both marry young, and at that end, increase the utility of child bearing years for a couple, we should be making things EASIER not HARDER, silly.
just taking the 300k-400k example.
(This incidentally is the more common situation most people find themselves in)
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You can pretty much have 1 parent fully devote his/her time raising the kids, and have 9 - 13 full years doing family planning wholeheartedly, whilst still being able to 'economize' themselves in other endeavours, like self-education, cottage industry(baking/cooking), tuition, providing childcare services to your neighbours and so forth.

The idea is that instead of focusing on making money, we're focusing on meeting each others' needs. Can you imagine if this culture extends forth on a national level? What a marvel it will be, supplementing our needs as a country, and as countrymen!

10 years, my friends, 10 whole years!
Couples who marry at 20 have easily until 30 to build a family with only 1 working parent.
Couples who marry at 25 have easily until 35 to build a family with only 1 working parent.
Couples who marry at 30 still have easily until 40 to build a family with only 1 working parent.
Oh my, even couples who marry at 35 have until 45 to build a family with only 1 working parent.
(last example not so easy, biological clock me thinks, but nevertheless...)

Recipe for high birth rates? No outstanding loans. Even if there were a loan, interest rates must not and cannot undo couple's level of financial security and erode their savings.
Reducing societies need to rely on asset appreciation that will make us feel rich now on the backs of the next generation, that will ultimately mortgage their future for what will soon be considered unattainable 'past prosperity' in the near future.

The moment a government starts to fall into a web of self deceit and is complacent to the point that it knows it cannot guaranty future events and stability, the more it should not hedge its citizenry's future positions for you moult instead, into a government that gets distracted by profits instead of its rightful KPI: that of public service, rather, government slowly but surely evolves into a corporatocracy instead.

I feel this incessant pursuit, initially earnest and steadfast, is made perverse into a pursuit of delusions of grandeur where the few live so large for so long, at the expense of the many, who are left wanting.

Soon i shall write about the divider effect that in my opinion triumphs the misunderstood and misappropriated concept of the multiplier effect.