190+ Public Officers Had Their Property Purchases Reviewed — Some Cases Have Now Been Referred To Police

Eight public officers have been referred to the police, after a government review of their property purchases that was started after earlier news regarding a National Bureau of Economic Research (NBER) working paper.

The research paper by the American-based private research organisation, titled ‘Do Social Norms Substitute for Enforcement? Evidence from Public Officials' Home Purchases in Singapore’, had claimed a statistical correlation between public officers in MRT-planning related agencies, and purchases of private homes near as-yet unannounced MRT stations.

To be clear, a police referral is not a finding of guilt. For now, Coordinating Minister for Public Services Chan Chun Sing has only said these cases warrant further examination, in a speech in Parliament on October 6.

However, he adds that the government hasn’t ruled out the possibility for further review.

Still, this issue will feel personal to many Singaporeans, who are historically quite sensitive to unfair advantages when it comes to ownership, buying, and selling opportunities in the real estate market.

Here’s what you need to know:

Why Are These Claims So Sensitive In Singapore?

Property market movements are heavily influenced by information. Quick-moving, savvy buyers and investors who capitalise on new developments, such as an MRT station, are in a much stronger position to reap significantly higher profits.

Normally, there would be a more level playing field, because market-moving information like this is announced publicly.

But there’s a fine line between just interpreting the Master Plan (e.g., knowing an area is being transformed) and knowing specific locations of upcoming train stations, or knowing about it long before any hint has been disclosed to the public.

But if a handful of individuals with this insider knowledge are allowed to participate in the market unsupervised, then ordinary buyers aren’t on the same footing. Then it turns into a very big deal in Singapore, where housing policy is closely linked to social mobility, public trust, and even - in some cases - retirement prospects.

So if individuals with privileged information are taking advantage of their position to enrich themselves, we won’t be surprised if the hammer comes down hard. And not just on the specific individuals, but a stricter implementation of policies governing how some civil servants may purchase property.

But There Are A Lot Of Nuances And Complications Involved

Even the research paper published by NBER, which kicked off this government review, was not a finding of individual misconduct. It only highlighted statistical patterns around certain transactions: that a higher-than-usual number of civil servants (in relevant rail planning agencies) had made property purchases near future MRT stations. This was before the stations were announced.

But statistical correlations don’t - by themselves - identify what exactly a particular buyer knew, or whether it was the main motive behind their purchase. It could be viewed as a suspicious pattern, but it’s not a proven offence.

The Existing Rules Already Go Beyond A Simple Declaration

Contrary to what you may have heard online, Singapore has a robust system of existing safeguards for this. Civil servants are required to declare private-property purchases as well as an annual declaration of any non-owner-occupied properties they hold.

More importantly, an officer who possesses non-public information relevant to a property purchase must seek approval from their head of agency before proceeding.

The requirement is not confined to property by the way, and it extends to transactions involving spouses and financially dependent children. Public officers are also prohibited from passing confidential information to relatives and friends for private gain.

Government agencies handling sensitive information can also impose added restrictions. External personnel like contractors and consultants may also be subject to confidentiality, conflict-of-interest, and information-handling restrictions.

Could This Lead To More Restrictions Imposed On Certain Buyers?

It is too early to say what, if anything, the Government will change. The review of the eight officers could portend some policy tweaks, always though it’s unconfirmed.

Minister Chan Chun Sing, in his speech to Parliament, says that the government will consider what the review shows about existing safeguards. He also iterated that additional measures will aim to be proportionate and practical.

To me, his comments suggest that any response is more likely to be targeted than broad-based. Speculatively, I think that the practical approach may end up being enhanced declarations from specific individuals. For example, when an urban planner is directly involved in determining a station location or land-use change, they may have to be more heavily scrutinised when it comes to what properties they buy.

The sticky part is how far this could expand. It could easily go beyond the teams of urban planners, engineers, and experts involved in future MRT planning. For example, there are civil servants in MAS who may have foreknowledge of impending loan restrictions, or of a higher floor rate being set.

Since urban planning and real estate development are so intertwined with many different industries, and so many segments of society, we could end up with a surprisingly large number of people subject to enhanced scrutiny or declarations.

For Now, Nothing Appears To Be Proven Yet

Again, none of this implies that the eight officers are guilty of wrongdoing. The Government has also noted limits in the NBER paper’s data and methodology - statistical correlation isn’t proof of intent.

But the fact that the Government extended its own review to transactions as far back as 2014, and examined the transaction history of over 190 civil servants, and referred eight cases for further investigation, shows it isn’t taking the matter lightly either.

And as a matter of opinion, we doubt policy changes need to wait for a guilty verdict. In terms of optics, all of this looks bad to many members of the public; the Singapore government has long been emphatic about trust and transparency.

So it’s possible that, even if no one is guilty of anything, we may see policy changes anyway. That may be what many ordinary Singaporeans who feel affronted by the claims might feel as a necessary response.

While most local homeowners accept that not every buyer has the same budget, acumen, or risk appetite, there is an expectation that the market is as fair as possible. That means minimising the impact of information that hasn’t gone public.