Friday, March 18, 2011

There goes my $x bak chor mee

I do not understand why people yearn for air-conditioned hawker centres, or upgraded suburban malls. Whenever I hear of this, only 1 thought goes to mind. There goes my $x bak chor mee. It's almost a certainty that after the renovation, the stall holders will increase their prices because rental rise is almost a certainty.

Recently, I'm sure you have heard that so and so place is being upgraded, and so and so place is going to be built, etc. Personally to me, shouldn't all this be done during the 2009 where inflation was low, to excite the economy? Inflation will most probably average over 5% for the 1H2011. Doing this kind of upgrades in this kind of environment will only push up inflation further because as we all know, property upgrades will only result in upward rental revisions, causing overall price increases. So far, I've never heard of property upgrades being "productive". It doesn't help that the whole world is also experiencing global food inflation. 10 cents more to our coffee anyone?

Personally, I feel that there is no need for major upgrades to hawker centres or suburban malls. You have to put it into context. Is it worth upgrading the hawker centre to air-conditioned if it is surrounded by 3-room, 4-room HDB flats? Do they usually eat-in or take-away? Why not just upgrade the air ventilation and put in some new technologies to keep the area cool? The hawker centre looks dirty? Is it the design of the hawker centre or even the quality of the cleaners? Can the upgrade be done such that there is no upward rental revision?

In this period of high inflation, do we still need the upward rental revisions to add on to our cost of living? One thing for certain. Inflation is going to remain elevated this year.

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