While the Government has to act to prevent the property market from getting beyond the reach of most Singaporeans, I am however not very comfortable that the latest steps - announced last week - are the best means of dealing with the issue.

Not only are the measures fairly drastic, they appear to be dealing more with curbing demand than raising supply.

The Government has claimed that there is no shortage of supply. It points out that the sites awarded last year under the Government Land Sales Programme (GLS) will yield about 13,300 units. For the first half of this year, it says it will make available sites that would be able to yield about 14,300 units.

Further, as at the end of the third quarter of last year, there were about 64,400 uncompleted units in the pipeline, of which roughly half were still unsold. These compare with the annual take-up rate of about 12,700 units between 2007 and last year. Unfortunately, there is a lag period between the site award and the sale of the property.

The latest attempt to cool the property market may have the unintended effect of reducing supply as developers decide to take a wait-and-see approach. They might be even willing to pay the penalties for missing completion deadlines rather than sell at a loss. It could also see the bigger developers with the financial muscle to hold being able to take advantage of those who can't hang on to their sites.

And will the new rules which took effect the day after they were announced - Jan 13 - force buyers to give up options, now that financing will be more difficult to obtain?

Under the new rules, financial institutions can only grant loans amounting to half the value of the properties purchased by non-individuals, such as companies, trusts and collective investment schemes. Individuals with existing outstanding mortgages can now borrow only up to 60 per cent of the value of their next property purchase.

Another unintended effect could be that those who have the financial resources will be able to get more properties on the cheap - to sell when prices recover later.

But should the Government be overly concerned with private-sector housing? Should it be going all out to prevent a fool from parting with his money?

Despite numerous warnings about the dangers of a property bubble bursting and that the current low interest rate regime might not last for too long, property prices, prior to the latest measures, continued to climb.

I believe the Government should be more concerned about housing the masses. It has done a marvellous job, having built more than one million units since the Housing and Development Board (HDB) was established. At present, some 900,000 units house more than four-fifths of the population. For the vast majority of newly-weds, their first home is likely to be an HDB flat. These are the people whom the Government has to be concerned with.

The Government has said it will be building more HDB flats - up to 22,000 Build-To-Order flats this year - to accommodate the masses. Will these be enough?

It should perhaps also get out of building executive condominiums (EC) units which provide condo-like facilities and the Design, Build and Sell Scheme (DBSS) units. The HDB says land for some 8,000 of these could be launched this year. Why should the HDB be catering to the needs of this select group?

Look at what is happening to the estates that were built by the HUDC for an earlier group of the so-called sandwiched class. Some like Farrer Court, Amberville and Bedok Reservoir, have been sold en bloc to private developers. The remaining ones - Shunfu, Braddell Heights, Pine Grove, Laguna Park, Neptune Court, Chancery Court and Eunosville - have been privatised or are in the process of being privatised in anticipation of en bloc sales. Why must public funds be used to cater to such profiteering?

Rather than be all things to all people, the Government should concentrate on housing the masses.

by Conrad Raj
05:55 AM Jan 21, 2011

Conrad Raj is editor-at-large with Today.

Source: www.todayonline.com

Published November 17, 2010

Pine Grove to en bloc, $1.7b reserve price: report


THE 99-year leasehold Pine Grove in Ulu Pandan could be up for collective sale again with an estimated reserve price of $1.7 billion, said Channel NewsAsia yesterday.


The deal, if successful, would be the largest in the collective sales market since Farrer Court changed hands for $1.34 billion in 2007.

Channel NewsAsia said that property agents have been gathering residents' signatures since November last year, and they have amassed 80 per cent of votes for the collective sale to start. A cooling period is now in place in case residents change their minds.

The 660-unit Pine Grove is a former HUDC estate. Several discussions had taken place between agents and residents to sell the estate in the last few years. The en bloc fever was particularly strong in 2007 as the property market heated up and developers snapped up several estates.

But not all residents in Pine Grove were keen on a deal then. A 'Save The Pine Grove' group was even formed to stop the sale process.

The collective sales market took a breather during the financial crisis and has revived recently, but deals have involved mostly smaller estates with more affordable price tags.

Sources: www.businesstimes.com.sg

Oct 6, 2010


AN OLDER HUDC flat at Shunfu Road has been sold for $1.1 million, a record high in Bishan for this phased-out type of Housing Board (HDB) project.

At least two other similar-sized HUDC flats have sold for slightly higher prices, but they featured condominium-like facilities not on offer at the Shunfu Road flat.

The 1,668 sq ft apartment on a high floor of Block 315 sold at $659 per sq ft (psf). It won HDB resale approval last month but was sold in July, before government cooling measures took effect.

ERA senior marketing director Sandy Lim, the agent who brokered the deal, said the home was valued at about $900,000, which means an impressive $200,000 cash-over-valuation (COV).

She said the buyers, Singaporeans, liked the flat’s location and spaciousness, even though it was close to its ‘original condition’. The buyers also agreed to pay the $30,000 in privatisation costs.

The estate, at blocks 314 to 319, is set to be privatised by the end of the year.

HUDC flats were built in the 1970s and 1980s as an option for middle-income citizen families. HDB phased out building them in 1987 as demand fell. There are 18 HUDC estates comprising 7,731 residential and 23 shop units. All but Braddell View have been privatised or identified for privatisation.

The latest price has raised eyebrows as it is unlike Braddell View, which has a clubhouse and swimming pool despite not being privatised yet.

Two 1,701 sq ft Braddell View HUDC flats at Block 10H sold for $1.2 million each in June and August this year.

A check on HDB’s website showed that the Shunfu HUDC estate has seen a premium in prices over neighbouring HDB flats, even though the latter might be closer to Marymount MRT station. For example, a slightly larger 1,701 sq ft HDB maisonette at nearby Block 301 sold for only $760,000.

Experts are surprised at the $1.1 million price, but say the city-fringe location, its imminent privatisation and collective sale potential could be key to the result.

Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said $1.1 million was a high price to pay for an older flat that had only about 75 years left on its lease.

‘The buyer is probably paying for the en bloc potential of the estate and also the generous space of HUDC flats that you can’t find anywhere else these days,’ he said.

Mr Eugene Lim, ERA Asia Pacific associate director, agreed the rarity of such large format units was a key reason for the bumper price. He added that the value of an HUDC estate would probably rise by at least 8 per cent to 10 per cent once privatised.

‘The increase will probably come after the estate is gated up or, if possible, when a swimming pool, gym or clubhouse is built…This work to enhance the property will definitely make the estate more appealing,’ he said.

ERA’s Ms Lim said she is currently marketing another 1,646 sq ft HUDC unit in the Shunfu estate for $1.28 million. This unit, however, is fully renovated with designer furnishing, she said.

A resident at Block 315, who asked to be known only as Mr Lim, said he was unlikely to sell his 1,770 sq ft flat as it was in ‘a very nice neighbourhood’. ‘We have seen fliers in the past on sales transacting at over $1 million, but we didn’t know whether to believe it…I might sell if an en bloc offer with the right price comes along, but probably not individually.’

Privatisation means HUDC residents become owners of their units as well as the common property, and so have better control over the running of their estate.

They will also no longer be subject to HDB’s housing policies such as having to seek approval to sublet their flats.

HDB said in July that privatisation costs that owners might incur – legal and survey fees, for example – will be capped at $30,000 per flat for the Shunfu estate.

esthert@sph.com.sg

Source: The StraitTimes