Complete Property Market Updates of Singapore

July 8, 2008

Rental flats: HDB to weed out errant tenants

Filed under: General, HBD Reviews, Rental News — Propertymarketupdates @ 4:20 am

THE Housing and Development Board (HDB) is clamping down harder on the abuse of its heavily subsidised rental flats.

Enforcement blitzes to identify illegally rented flats will be stepped up and they will be extended across a wider area of the country, said the HDB yesterday.

Its response comes amid growing disquiet on several fronts about the abuse of subsidised rental housing.

MPs, residents of rental blocks and eligible Singaporeans who feel they have been left in the queue while foreign workers snap up cheap flats have all called for action.

The Straits Times reported last week that an increasing number of tenants have been illegally subletting HDB flats to cash in on the demand for low-priced accommodation. The flats are often leased to workers from Malaysia, China and India who are either in the dark about rules or just want the cheapest rental option.

Some MPs told The Straits Times that residents had alerted them to the illegal rentals and demanded more enforcement.

‘There should be more thorough checks,’ said Aljunied GRC MP Cynthia Phua. ‘Subsidised housing should be given to deserving families. People who do not need it should let it go.’

HDB rental flats have soared in demand over the past year, with the waiting list up by at least 30 per cent in recent months. There are about 4,000 applicants in the queue with a waiting time of 15 months - double the wait in 2006.

Ms Lee Bee Wah, an Ang Mo Kio GRC MP, frequently gets appeals from Singaporeans who are eligible for rental flats but have been stuck in the queue for several months.

The issues concerning rental flats have been raised in Parliament before. National Development Minister Mah Bow Tan said in a February session that HDB will increase its supply of 42,000 flats by 20 per cent. It is also reviewing its eligibility scheme.

He also said then that enforcement will be carried out to ‘weed out those who do not need or have abused the privilege of a rental flat’.

HDB has stepped up enforcement efforts and extended blitzes to areas such as Jalan Minyak, Telok Blangah, Jalan Bukit Merah, Kallang- Whampoa, Mei Ling Street and Clementi this year. These are on top of annual inspections ‘to ensure the tenancy of the flat is in order’.

Tenants illegally renting out their home can lose the flat and face a five-year ban from renting or buying HDB property.

As of April, HDB had recovered 131 flats since 2005.

An MP for Pasir Ris-Punggol GRC, Mr Teo Ser Luck, said the community could also be roped in to help. ‘There is a greater demand for rental flats and we need everyone’s help to highlight errant cases,’ he said.

HDB said that about 30 per cent of the cases of illegal renting uncovered stemmed from residents’ feedback.

North West District Mayor Teo Ho Pin, who is also MP for Bukit Panjang, said the problem goes beyond housing demand and touches on the lack of cheap, adequate housing for foreign workers.

‘We need to quickly provide solutions to house the foreign workers,’ said Dr Teo, so as not to crowd out needy Singaporeans.

Retiree Amy Tan Ai Bee, 75, is one such Singaporean. She has spent 14 months in the queue: ‘I think it’s really unfair that I waited for such a long time, yet there are people who are renting their flats out for a profit. I hope this can be addressed soon.’

Source : Sraits Times - 5 Jun 2008

Sim Lian Land is top bidder for DBSS site at Simei

Filed under: Auction, Developer News, General, HBD Reviews — Propertymarketupdates @ 4:08 am

SIM Lian Land Pte Ltd yesterday emerged as the top bidder in a Housing & Development Board (HDB) tender for a Design, Build and Sell Scheme (DBSS) site at Simei Road.

The $52 million bid, or $137 per square foot per plot ratio (psf ppr), was at the lower range of earlier market expectations. Industry observers projected in April that the site could fetch between $49 million and $76 million, or $130 to $200 psf ppr.

The fifth DBSS site, with a lease term of 103 years and a maximum allowable gross floor area of 380,300 sq ft, attracted another bid from AMK Development Pte Ltd. Its bid of $37.3 million, or $98 psf ppr, was 28 per cent lower than Sim Lian Land’s.

Managing director of Sim Lian Land Kuik Sing Beng told BT that the site is expected to yield about 340 units. Five-room flats would make up 60 to 70 per cent of the units, and the rest would be a mix of four- and three-room flats. Sim Lian Land plans to launch the units for sale next May.

Mr Kuik also said that the breakeven cost would be about $350 psf of sellable area. He noted that the selling price for resale flats in the Simei area is about $380 psf of sellable area.

Cushman & Wakefield managing director Donald Han believes that HDB is likely to award the site. He observed that in spite of the gap between the two bids, Sim Lian Land’s bid is in line with current market expectations.

According to Mr Han, the small number of bids reflects the cautious attitude that developers have adopted. Rising construction costs are also posing a challenge for developers, Mr Han pointed out. Echoing this, Mr Kuik said that construction costs have increased substantially in the past one year.

HDB is expected to make a decision in the next two weeks.

Source : Business Times - 4 Jun 2008

July 1, 2008

New HDB flats priced too high

Filed under: Community Voices, General, HBD Reviews — Propertymarketupdates @ 3:40 am

I READ with interest news on the Housing Board website on the new build-to-order (BTO) projects launched in Punggol and Sengkang.

However, I am astounded by the high prices of the four- and five-room flats. The five-room premium flats in the Punggol Sapphire BTO project are selling at between $330,000 and $400,000. These prices are comparable to the new flats on sale in mature estates just two years ago.

They cost almost $100,000 more, or an almost 50per cent jump, than similar flats in Punggol just two to three years ago.

By pricing the units so high, is HDB not further stoking the inflationary trend of home prices?

Source : Straits Times - 2 June 2008

June 27, 2008

HDB resale price growth expected to remain low

Filed under: General, HBD Reviews — Propertymarketupdates @ 3:20 am

Moderate 4-10% growth seen for 2008: Knight Frank

THE rate of price increase of Housing and Development Board (HDB) resale flats will further decelerate in the next six to nine months, resulting in a relatively moderate 4-10 per cent growth for the whole of 2008.

Knight Frank director (research and consultancy) Nicholas Mak added: ‘If the local economy were to slip into a recession in 2008, overall prices of HDB resale flats could vary between a 2 per cent contraction and a 3 per cent growth for the year.’

Knight Frank’s projections are based on HDB’s resale price index, which increased in Q1′08 by 3.7 per cent over the previous quarter. But Mr Mak explained that price movements in the resale market are difficult to project because data on average valuations are not available even if median prices, which is likely to include cash-over-valuation (COV), is.

As such, Mr Mak expected that median COV of all resale flats, which fell to $21,000 in Q1′08 from $22,000 in Q4′08, could continue to fall this year.

Another possible cause for lament is that potential HDB upgraders - a significant factor in private mass market housing - could disappear in sync with falling HDB resale transactions.

In Q1′08, transactions fell about 6 per cent to 6,358 units from 6,748 units in Q4′07.

Knight Frank also believed that HDB upgraders have been supporting the private secondary market, which saw 3,521 units transacted in Q4′07.

While it did not have precise numbers of HDB upgraders buying into the secondary market, it noted that in Q4′07, the greatest number of private secondary market transactions occurred in the Outside the Central Region (OCR), and was ‘attributable to the HDB upgraders bracket’.

And Knight Frank believed that there could be an emerging resistance to swelling home prices.

In January, Knight Frank noted that City View @ Boon Keng, under HDB’s Design, Build and Sell Scheme (DBSS), pushed prices to $727,000 for a five-room unit. While the launch generated a lot of buzz, at end March 2008, 250 of the 714 flats available were still unsold.

‘The issue that arises is the validity of the pricing of such DBSS flats. Keeping in mind that there are more of such developments proposed in places like Ang Mo Kio, Bishan, Toa Payoh, Simei and Bedok, and given that they are still bound by public housing rules such as the income ceiling of buyers, one could begin to wonder about the intrinsic affordability of public housing initiatives,’ Mr Mak said.

Source : Business Times - 30 May 2008

June 24, 2008

Tenants cashing in on rental flats

Filed under: General, HBD Reviews, Legal Ground, Regulators, Rental News — Propertymarketupdates @ 3:50 am

Heavily subsidised HDB units, which are much in demand, are often sub-let to foreigners

SOME tenants in heavily subsidised HDB rental flats have been illegally sub-letting their homes to cash in on surging demand for cheap accommodation.

There are no official figures but tenants in some estates say that as many as one in five rental flats is rented out to foreign workers - a clear breach of HDB rules.

The flats are often leased to workers from Malaysia, China and India - who are either unaware that they are renting illegally or do so because the units are the cheapest option.

Property agents and tenants told The Straits Times that there is an increasing number of such flats put up for rent by people keen to cash in on foreign workers’ demand for cheap housing.

A Malaysian, who declined to be named, told The Straits Times that she leases a two-room HDB rental flat in Toa Payoh with a friend for $700 a month.

That could be as much as $650 more than the subsidised rent - a tidy profit for the original tenant.

Their ‘landlord’ told them to keep windows shut and not to answer the door. The 35-year-old said she knew the deal was illegal but she was ‘desperate for cheap housing’, adding in Mandarin that ‘If I didn’t rent this flat, I can’t afford anything else’.

The abuse of HDB rental flats comes amid soaring demand for such homes, which are meant for needy Singaporean families.

The waiting list has shot up by at least 30 per cent over the past few months, with about 4,000 applicants in the queue. This translates to a 15-month wait, which is double the time in 2006.

Eligible Singaporeans can apply for HDB rental flats and pay $26 to $205 for a one-roomer and $44 to $275 for a two-roomer, depending on household income and other factors. The HDB manages about 43,000 such flats and plans to add 20 per cent more.

A Member of Parliament for Ang Mo Kio GRC, Ms Lee Bee Wah, told The Straits Times that residents had complained about the problem when she visited Teck Ghee last month.

‘People tell me their neighbours are renting their flats out. They should not be hogging the flats if they have an alternative place to stay,’ said Ms Lee.

When The Straits Times called five property agents last week, four said they had one- and two-room flats available for rent. Most of these flats would be rental units, said HDB.

And it is not just low-paid foreign workers renting such flats.

A Singapore permanent resident from Malaysia said he used to rent such flats as they were the cheapest on the market.

The 28-year-old finance executive rented a two-room subsidised flat in Owen Road for $550 in 2006. A similar unit on the open market would cost at least $1,000. Now, government-subsidised flats can fetch $1,000 in good locations, he added.

When The Straits Times visited Toa Payoh rental blocks last week, some tenants said they noticed an increasing number of workers from China and Bangladesh living in their blocks.

Coffeeshop worker Poh Lee Tee, 45, said her neighbour frequently rented out his flat to Indian workers, who kept her up when they came home from work.

‘But I don’t want to report my neighbours, in case I get into trouble,’ said Madam Poh.

Mr Wu Mu Song, 74, who has lived in one of the rental blocks for the past 30 years, estimated that two out of 10 flats are rented out illegally. ‘This is unfair; there are others who need these flats more,’ he said in Mandarin.

Although abuse of rental units is on the rise, Mr Wu said it was hard to catch illegal tenants as they often ignore visitors - including HDB officers.

Tenants illegally renting out their home can lose the flat and face a five-year ban from renting or buying HDB property.

The HDB recovered 17 flats in 2005 and 27 last year. The increase was due ‘to better public awareness and feedback’, it said.

It also conducts inspections at least once a year and carries out regular ‘enforcement blitzes’.

One blitz recovered 57 rental flats in three months in 2003 and 35 in a crackdown that began last year in areas like Tampines, Ang Mo Kio, Toa Payoh and Bukit Merah.

Anyone aware of illegal renting can contact the HDB at flw1@hdb.gov.sg. or call 6490 2410.

Source : Straits Times - 29 May 2008

Cases of illegal sub-letting

Filed under: General, HBD Reviews, Legal Ground, Rental News — Propertymarketupdates @ 3:46 am

Blk 63 TOA PAYOH LORONG 5

When The Straits Times visited this HDB rental block last week, we identified one unit where voices in a heavy Chinese accent could be heard. The windows were shut, save for a panel at the top where we could see a light and a suitcase. When we knocked on the door, the voices fell silent and, even after repeated knocks, nobody answered the door.

HDB also cited two recent case studies of tenants illegally sub-letting their rental flats.

Blk 3 JALAN BUKIT MERAH

A one-room flat at Block 3, Jalan Bukit Merah, was leased by the HDB to the tenant and her two children. An inspection in January revealed that the flat was sub-let to five Chinese nationals at a monthly rental of $900. The tenant was working in Malaysia while her two children were living with relatives.

Blk 805 KING GEORGE’S AVE

A two-room rental flat was leased to the tenant and his two children. An inspection by HDB revealed that the flat was sub-let to Chinese nationals for $800 per month. The tenant and his family were living with his mother at Chai Chee.

In the latter two cases, the units were recovered in January and February, and the tenants banned from renting HDB flats for five years.
 
What’s the penalty?

Tenants who illegally sub-let their flats will have their units recovered by HDB, and banned from buying or renting a flat from HDB for five years, while any unauthorised occupier (above 18 years old) will be barred for 2-1/2 years.

Source : Straits Times - 29 May 2008

Give singles a shot at rejected flats

Filed under: General, HBD Reviews — Propertymarketupdates @ 3:20 am

THE Housing and Development Board (HDB) should be stricter on frivolous applicants for its new flats (’HDB targets frivolous applicants”, last Friday).

The HDB should also allow singles over 35 years of age to apply for flats rejected by successful applicants. Single Singaporeans will probably not be as fussy as the others.

Currently, singles are limited in their choices when buying an HDB flat.

Allowing single Singaporeans the chance to buy rejected flats may also ensure that such flats are not left vacant for years, flats such as those in Jurong West, Punggol and Sengkang.

Source : Straits Times - 28 May 2008

New flats under stricter rules in hot demand

Filed under: General, HBD Reviews — Propertymarketupdates @ 3:18 am

DEMAND has been strong for the latest batch of Housing Board (HDB) flats - despite new rules designed to prevent frivolous applications.

As at 5pm yesterday, 2,397 applications had poured in for the 1,485 premium flats launched by HDB just last Thursday.

Housing experts say demand looks likely to stay healthy, although the total number of applications

may drop as HDB’s new rules begin to deter time-wasting and frivolous applications.

The latest flats are likely to be three times oversubscribed, they say - a drop from comparable sales earlier this year, which were about five times oversubscribed.

HDB’s two newest projects - Compassvale Pearl in Sengkang and Punggol Sapphire - are being offered under HDB’s build-to-order (BTO) system, where flats are built only when a certain level of demand has been reached.

HDB tweaked its application process last week to address concerns over relatively low take-up rates for new flats despite thousands of applications.

Under the new rules, a first-time buyer who rejects an offer to buy a flat twice at HDB’s BTO or balloting sales exercises will lose his first- timer priorities for a year. That effectively puts him at the back of the queue with the second-timers.

The new rules raised fears that buyers offered leftover flats will be penalised. HDB has since said it may exercise flexibility if applicants at the back of the queue have good reasons for rejecting available flats.

Market watchers such as PropNex chief executive Mohamed Ismail told The Straits Times he estimates applications will drop by 40 per cent under the new rules.

‘But as new HDB flats are still the cheapest option for newlywed couples, demand should still be at the 70 per cent take-up rate,’ he said.

ERA Realty Network’s assistant vice-president Eugene Lim agreed. ‘The new rules cut out the time- wasters…what’s left is real demand.’

Earlier this year, BTO projects Punggol Spring and Jade Spring @ Yishun Phase 2 were about five times oversubscribed, HDB figures show. Mr Ismail said the latest projects are likely to be about three times oversubscribed, based on yesterday’s figures.So far, Punggol Sapphire is the more popular, with 1,824 applications for 1,065 homes, compared to 573 for 420 homes at Sengkang.

First-timers such as IT officer Chua Yong Kiat, 28, said it will not be a surprise if total numbers drop.

‘I’ll definitely only apply if I’m sure I would buy a flat at that location. If not, getting that dream home becomes much harder if you lose your first-timer priorities,’ he said.

Source : Straits Times - 28 May 2008

June 21, 2008

HDB ‘lab’ paving the way for broadband vision

Filed under: General, HBD Reviews, Regulators — Propertymarketupdates @ 7:13 pm

Government agencies linked up in low-key tests to study disruption

SOMETIME in the near future in a HDB heartland, housewives will be able to download an entire Korean movie in mere minutes , instead of hours. Researchers at Biopolis - a biomedical science research & development hub - will be able to perform complex calculations previously handled by supercomputers on their laptops.

All thanks to a new fibre optic network that is being built in Singapore.

And four inconspicuous public housing blocks at Boon Keng and Commonwealth may hold the key to realising Singapore’s dream of upgrading to this new ultra-fast broadband highway.

Unknown to the public, the humble housing units collectively formed the centrepiece of a low-key, multi-agency trial to assess any disruption that could result from constructing the new Internet backbone.

BT understands the tests were initiated by the Infocomm Development Authority of Singapore (IDA) and that at least two other state agencies - the Housing and Development Board (HDB) and the Land Transport Authority (LTA) - were roped in.

The upcoming Next-Gen NBN (National Broadband Network) is a key part of the government’s plan to lay a new technology foundation that will serve residents and businesses for the next 25 years or more.

When fully-completed in 2015, the network will deliver blazing access speed of 1 Gbps (gigabit per second) and beyond to power new e-commerce applications and other bandwidth-sapping services like biomedical research and tele-medicine.

The main aim of the tests in Boon Keng and Commonwealth - carried out mostly in the second half of 2007 - was to determine the most efficient way of extending high-speed fibre-optic cables from their current end-points to individual apartment blocks and office buildings. This will complete the so-called ‘last mile’ needed to achieve the huge broadband speed boost.

Singapore already has an extensive underground fibre-optic network in place - owned by companies such as Singapore Telecommunications, StarHub and even SMRT - but it ends some distance from most residential and commercial buildings.

Cheaper copper cables tend to be used thereafter to connect offices and homes to the Internet, but this ‘last-mile’ connection is set to be replaced with fibre-optic links, based on two proposals IDA has received for the new network.

‘IDA worked together with fellow government agencies such as HDB and LTA and the trials involved the testing of innovative civil works techniques for Next-Gen NBN,’ an IDA spokesperson confirmed.

‘The trials were conducted by a contractor appointed by IDA and focused on the outside plant that did not include in-house rewiring. The intent of the trials was to explore innovative deployment techniques that could reduce inconvenience to the public and minimise disruption.’

This is an important consideration for the regulator, which wants to roll out the new network with minimal fuss. When StarHub first built its $600 million infrastructure to deliver cable TV and broadband services, road lane closures were common as laborious excavation was carried out to put the new cables in place.

IDA hopes advances in cabling techniques mean that people will have to put up with fewer disruptions this time around.

To achieve this, approaches that were tested included running cables and ducts through covered walkways and drainage systems rather than digging up roads, according to sources familiar with the project.

The trial results were shared with bidders for the new network. Feedback was positive and they felt that minimal disruption and inconvenience could be achieved, IDA said.

The eventual task of translating the experiments into real-life will rest on the shoulders of the winner of IDA’s recently-concluded Network Company (NetCo) tender.

The battle to land this mammoth contract is now between two consortiums incorporating all three local telcos.

The winning NetCo will be helped by government subsidy of up to $750 million to offset the heavy cost of building the network, which some industry watchers estimate to be $1.5 billion or more.

SingTel has submitted a bid as part of OpenNet, a group led by Canada’s Axia NetMedia, which includes two other members - Singapore Press Holdings and Singapore Power subsidiary SP Telecommunications.

StarHub has joined hands with MobileOne and Hong Kong’s City Telecom to make up the rival Infinity Consortium.

IDA expects to pick the winning Netco by the third quarter of this year.

Source : Business Times - 26 May 2008

June 19, 2008

HDB to be flexible on new rules for first-timers

Filed under: General, HBD Reviews, Market Watch — Propertymarketupdates @ 5:35 am

FIRST-TIME buyers can be assured that they will get to select new flats from a reasonable pool before they are sent to the back of the queue, said National Development Minister Mah Bow Tan yesterday.

And, in a separate assurance, the Housing Board said it may exercise flexibility if applicants at the back of the queue have good reasons for rejecting available flats.

The comments came after HDB changed application rules on Thursday, leaving some first-timers worried that buyers offered leftover flats by the HDB will effectively be penalised.

Speaking to reporters yesterday, Mr Mah said that for first-timers, a new home is a ‘big investment, so you don’t want HDB to say take it or leave it…This is also why HDB will make sure there’s a reasonable number of flats for couples to select, and it’s not the last flat in the whole development’.

The new rules are aimed at tightening HDB’s application process to deter first-timers from applying frivolously.

A first-time buyer who rejects an offer to buy a flat twice at HDB’s build-to-order or balloting sales exercises will now lose his first-timer priorities for a year.

That effectively puts him at the back of the queue with the second-timers.

HDB’s move came after recent reports highlighted the relatively low take-up rate of new flats despite thousands of applications.

The problem is that more serious buyers in the queue are being pushed further back. For the HDB, a lot of time and effort is wasted on administering and managing these people, said Mr Mah.

‘We’re trying to move those with urgent needs to the front of the queue,’ he said.

Some first-time home buyers whom The Straits Times spoke to, however, were concerned that the rules were too strict.

Technical support engineer Sharlina Mohd Sahak, 28, said it was unfair if only leftover flats were on offer or if they were in an undesirable location. ‘There are pros and cons to this new rule as it sieves out insincere buyers, but overall I find it a bit harsh,’ she said.

When contacted, the HDB said it expects genuine buyers to book a flat if there is still a unit available.

Even if they do not, they are given a second chance to buy before stringent measures are applied, said HDB. ‘For applicants at the bottom of the queue, HDB may exercise flexibility if they have very good reasons why they did not select any of the last few available flats.’

Housing experts, such as PropNex chief executive Mohamed Ismail, said the latest changes were ‘timely, given the increasing number of unsuccessful take-ups’.

But others, such as Chesterton International head(research and consultancy) Colin Tan, said there could be other reasons such as higher prices to explain higher dropout rates.

Mr Mah said there was ‘no evidence’ to support this argument. It was not likely, he said, because prices are publicised before buyers make their applications.

Source : Straits Times - 24 May 2008

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