Poor will not be neglected in HDB upgrading

Poor will not be neglected in HDB upgrading

 

Revised schemes allow for more flexibility and govt subsidies

 

By Tan Hui Yee

 

THE Housing Board will not neglect the needs of the poor, or be rigid, as it upgrades flats under schemes which have recently been revamped.

 

The Minister of State for National Development, Ms Grace Fu, gave this assurance as the Housing and Development (Amendment) Bill, which paves the way for one of the new programmes, was passed in Parliament yesterday.

 

During the debate on the Bill, various MPs had put forward wish-lists.

 

Madam Cynthia Phua (Aljunied GRC) wanted the Government to absorb the co-payment that will be required for lower-income households to get their homes upgraded.

 

Under the new Home Improvement Programme (HIP), which focuses on essential improvements within a flat such as repairing spalling concrete, residents will have to pay between 5 and 12.5 per cent of the total bill. They can opt out of some items.

 

The other new scheme recently introduced – the Neighbourhood Renewal Programme, where improvements are made across several precincts – will be fully paid for by the Government.

 

Mr Liang Eng Hwa (Holland-Bukit Timah GRC) asked for items such as aluminium window frames or accessibility features for the elderly and disabled to be added to the list of essential improvements under the HIP programme.

 

He also wanted the Government to consider extending its upgrading schemes to private estates.

 

Ms Fu rejected Mr Liang’s suggestion that government-subsidised upgrading be offered to private estates, pointing out that private homes could be owned by foreigners as well as permanent residents. Unlike owners of HDB flats, private home owners also have the option of selling their homes collectively.

 

On the question of lower-income households, Ms Fu said flat owners can cut their bills by opting out of various improvements.

 

Ms Fu assured members that the HDB has in place ‘sufficient financial help’ for struggling flat owners, who are given the option to pay their share of the upgrading bill through instalments over a long time. To date, it has not taken any flat owner to court over unpaid upgrading bills.

 

Meanwhile, the HDB will consider elderly-friendly features like grab bars as part of the optional improvement items under the HIP if they prove popular. Current options are limited to upgrading toilets, new entrance doors, grille gates and refuse hoppers.

 

However, flat owners are free to make separate requests to HDB contractors to install such items in their flats at the same time as their flats are upgraded.

 

Ms Fu stressed that the upgrading programmes are ‘not a substitute for routine maintenance, cyclical repair the home owner and town councils will have to undertake’.

 

Meanwhile, opposition MP Chiam See Tong (Potong Pasir) asked why the flats in his ageing ward have not been upgraded over the two decades in which upgrading has been available.

 

Ms Fu replied that while his ward is eligible for the upgrades, the Government prioritises districts based on their support of government policies.

 

Source: Straits Times

Service apartments seek shorter stays to ease hotel room crunch

Service apartments seek shorter stays to ease hotel room crunch

 

Industry association proposes rule on stay of 7 nights or more be lifted

 

By Lim Wei Chean

 

FOR 20 years, there has been a little-known rule governing service apartments: Guests have to stay seven nights or more.

 

Now, with an eye on the current hotel room crunch, the Serviced Apartments Association proposes that this condition be lifted.

 

There are at least 3,500 service apartment units here, compared to more than 37,000 hotel rooms.

 

If the association gets the go-ahead, this will have an impact on the short-

 

stay accommodation market. Association president Alfred Ong told The Straits Times it is high time the rule was lifted – a rule he said is unique to Singapore.

 

He added: ‘If Singapore wants to be a first-class city, then it should give customers the choice, whether it be service apartments, hotel rooms or budget accommodation.’

 

Although the association said it began preliminary discussions with the Singapore Tourism Board (STB) and the Urban Redevelopment Authority (URA) in 2006 and stepped them up last year, the two agencies said they have yet to receive a formal proposal to lift the rule.

 

Travel industry players said such a move will help ease the room crunch in Singapore where hotels have registered high average occupancy of more than 80 per cent.

 

This has led to higher room rates, which in turn have led to concerns over Singapore’s competitive edge in the mass tourism sweepstakes.

 

The latest American Express market forecast on hotels in the Asia-Pacific, released last week, predicts that corporate rates in Singapore will go up by some 29 per cent this year.

 

This is higher than its projections on Hong Kong at 17 per cent, Beijing at 21 per cent and Kuala Lumpur at 20 per cent.

 

This is despite the 8,850 rooms added last year and this year.

 

Mr Prashant Aggarwal, head of American Express Consulting for Japan, the Asia-Pacific and Australia, cited increased demand with higher visitor arrivals as part of the reasons driving its projection.

 

However, Plaza Royal on Scotts hotel general manager Patrick Fiat said the industry should not be too concerned about the rates hike.

 

He told The Straits Times: ‘For the past 10 years, hotel rates have been low. So, the current spike is just hotel rates catching up with rates elsewhere.’ He expects levelling out by next year.

 

However, he is opposed to allowing service apartments to accept shorter stays.

 

But the service apartment industry sees the proposed move as complementary rather than competitive.

 

Ms Tonya Khong, general manager of Fraser Suites and Fraser Place, said: ‘There may not be much impact on the industry’s occupancy if the minimum duration of stay requirement is lifted.

 

‘We foresee that this move can help bridge the gaps for medical and family tourism, as cooking and children-friendly facilities as well as spacious living space will mean a great deal to these visitors.’

 

Mr Ong said in other Asian cities, most service apartment guests are middle- to long-term guests. Only about 30 per cent are short-stay guests.

 

But he added that allowing shorter stays will mean more efficient use of service apartments, which always have some spare days between long-term guests.

 

Source: Straits Times

Condo-style flats only a small part of public housing, says Mah

Condo-style flats only a small part of public housing, says Mah

 

PRICEY condo-style flats will remain a small proportion of the total public housing supply with the Government pledging yesterday to continue providing affordable homes.

 

Its assurance came as high-end flats in Boon Keng offered by private developers were launched recently for up to $727,000 for a five-room flat.

 

The flats come with interior layouts and fittings more commonly seen in private condominiums, such as bay windows in bathrooms, large balconies and built-in wardrobes.

 

Buyers are also concerned that prices of resale Housing Board flats shot up 17.4 per cent last year – the highest in a decade – and that sellers in coveted districts are demanding as much as $100,000 in cash over the valuation of their flats.

 

National Development Minister Mah Bow Tan told Parliament that high-end flats – built under the Design, Build and Sell Scheme (DBSS) – ‘serve to fulfil the needs of a niche segment of the HDB market – those with higher aspirations and who can afford a higher price’.

 

Under the programme, developers are free to design and price the flats as long as they work within the rules of public housing. This means they have to sell flats to families earning no more than $8,000 a month – the limit for households buying public housing.

 

The first such project, the 616-unit Premiere@ Tampines by Sim Lian Land, drew almost 6,000 applications for its two-, four- and five-room flats with prices from $138,000 to $450,000.

 

The second, the 714-unit City View@Boon Keng by Hoi Hup Sunway Development, drew about 3,500 applications for three- to five-room flats. Prices ranged from $349,000 to $727,000.

 

The City View prices had prompted some to wonder if they were affordable to those earning $8,000 a month. Nominated MP Eunice Olsen asked if the income ceiling could be raised for such flats.

 

Mr Mah said no, because it could result in developers pricing their flats even higher.

 

The minister added that private companies taking part in the DBSS scheme develop the projects knowing there is an income cap on buyers.

 

He told Dr Ong Seh Hong (Marine Parade GRC), who asked why the HDB had ‘shifted’ from its original mission of providing affordable housing, that the board was, in fact, staying the course.

 

In recent years it had re-introduced new two- and three-room flats, while additional housing grants are also being offered to low- income earners, he said.

 

Besides, recent buyers of new HDB flats actually spend just 20 per cent of their monthly household income on housing. This is about half of the debt servicing limit typically used by financial institutions.

 

Mr Mah added that the HDB was monitoring resale prices, but urged buyers who cannot afford the cash-over-valuation sums demanded by sellers to postpone their purchases or apply for new – and cheaper – HDB flats instead.

 

Demand for such homes has been rising as well. Last month, 316 surplus flats in the outlying towns of Hougang, Sengkang and Punggol drew 5,147 applications.

 

TAN HUI YEE

 

Source: Straits Times

State land sales in demand as en bloc fever cools

State land sales in demand as en bloc fever cools

 

Developers find pricing of GLS sites more in tune with market realities

 

By KALPANA RASHIWALA

 

(SINGAPORE) Developers seem to be turning increasingly to state tenders instead of en bloc sales to restock their residential landbanks. This is because land pricing at state tenders is more responsive to the current bearish market conditions.

 

Also, the Government Land Sales (GLS) programme, with its staple of mass-market, suburban residential sites, is currently just what developers want, as this market segment is expected to shine after the steep run-up in high-end home prices last year.

 

Figures compiled by Credo Real Estate show that while collective sales languished in the last two quarters of 2007, sales of GLS residential sites spiked in Q4. Developers picked up slightly more than $1 billion worth of 99-year leasehold residential sites sold through the GLS programme in Q4 of last year alone, surpassing the $865 million of such sites they had bought in the first nine months of the year.

 

In contrast, only $1.28 billion of residential collective sale sites changed hands in Q4 last year, down drastically from $11.2 billion in the first nine months.

 

Credo Real Estate managing director Karamjit Singh says: ‘En bloc sales have rigidity in their pricing mechanism; once the reserve price has been set in the collective sales agreement (CSA), it is difficult to lower it, as you’ll have to go through all the majority owners who agreed to the sale to sign a supplemental CSA.’

 

‘In contrast, the pricing for a state site offered through the GLS programme can be more reactive to the mood of the day, presenting an opportunity that developers are seizing today,’ he added.

 

Knight Frank executive director Nicholas Wong says: ‘Collective sales have a higher chance of success when the market is trending up as the reserve price in the CSA is always pegged to the last done transaction of a similar property. But when the market is flat or on a downturn, en bloc sales become more difficult to transact – unless the site boasts some unique propositions such as a landmark location, proximity to MRT stations, etc. Owners will have to price their sites reasonably to find buyers.’

 

Putting things in perspective, a seasoned market observer said: ‘Because the market has slowed, the spread between what developers are willing to pay and en bloc owners’ expectations has widened. En bloc sales involve many owners and it takes time for them to realise they have to lower their expectations.

 

‘Whereas for state land tenders, the minimum pricing is decided by the Chief Valuer, who is on top of the market and is more nimble to changes in market moods and values.’

 

The usual government policy is to sell a site if at least 85 per cent of the Chief Valuer’s price has been met.

 

For sites sold through the confirmed list, Chief Valuer’s assessment is made on the tender closing date. For sites sold through the reserve list (which are triggered for release only upon successful application by a developer), the Chief Valuer’s assessment is made before the government opens any application by a developer seeking the release of the site.

 

DTZ executive director Ong Choon Fah also says developers find it ‘more straightforward’ to pick up a site at a state tender, unlike the hassle of going through the Strata Titles Board and potential court hearings in the case of collective sales. ‘Developers are also balancing their portfolios. After the run-up in high-end home prices, the mass-market is expected to shine this year,’ Mrs Ong added. Residential sites in the GLS programme are largely in suburban locations, suitable for development into mass-market condos catering to upgrader demand.

 

Mrs Ong expects developers to continue preferring GLS sites to restock their landbanks in the months ahead – especially if the government offers more 99-year private condo sites in mature Housing & Development Board estates near MRT stations.

 

Credo’s Mr Singh expects the volume of residential collective sales deals to ease from last year’s record $12.5 billion to about $4-6 billion this year. With weaker market sentiment, owners will have to be more realistic about their pricing, especially in the suburban market where the GLS is a formidable source of alternative land supply for developers, albeit on 99-year leasehold tenure.

 

‘But there will still be en bloc sales because they are the only credible source of prime sites right now. Previously, Sentosa Cove used to be an alternative source of supply of high-end residential sites. But land sales there have come to an end. En bloc deals involving prime sites will take place – if prices are realistic,’ he added.

 

Source: Business Times

 

Genting confirms talks to build hotel in Sports Hub

Genting confirms talks to build hotel in Sports Hub

 

Shatec signs pact to be master caterer of hub for 25 years

 

By LYNETTE KHOO

 

(SINGAPORE) Genting International plc (GIL) yesterday confirmed a BT report that it is currently in preliminary talks with Singapore Sports Hub Consortium to build a hotel in the Sports Hub.

 

In an announcement on the Singapore Exchange, GIL said ‘preliminary planning suggests the future hotel could have over 500 rooms which would significantly add to the managed room stock of the company’s integrated resort on Sentosa when it is operational.’

 

This is not expected to have any material impact on the consolidated net tangible assets and earnings per share of the company for the financial year ending Dec 31, 2008, it added.

 

Representatives of its subsidiary Resorts World at Sentosa Pte Ltd were present at a celebration yesterday for the SSH consortium for being chosen as the preferred bidder for the Sports Hub – to be called Premier Park – from among three short-listed consortiums.

 

Krist Boo, deputy director of communications at Resorts World at Sentosa told BT that the proposed arrangement is for GIL to build and operate the hotel over the 25-year tenure but details on the hotel itself are still being worked out.

 

Resorts World at Sentosa, the integrated resorts project by Genting International, is building six hotels with a total of 1,830 rooms by 2010.

 

A BT report had quoted managing director of Dragages Singapore Ludwig Reichhold as saying that the consortium is in discussion with GIL to invest in a hotel in the Sports Hub, with a potential construction cost of $200 million.

 

The report added that the SSH consortium is in talks to team up with Frasers Centrepoint on the Sports Hub’s retail space.

 

Talks with GIL and Frasers Centrepoint were already underway during the tendering process. An SSH booklet on the overview of its proposal contained logos of its team members including GIL and Frasers Centrepoint. A spokesperson for Dragages confirmed that discussions dated back to 2006.

 

Dragages Singapore is the lead partner in the SSH consortium and is a subsidiary of France-based Bouygues Construction, which has been involved in more than 30 public-private-partnership (PPP) projects world wide and developed infrastructures such as the Stade de France stadium in Paris and the Asia World Expo in Hong Kong.

 

Under the Public-Private-Partnership arrangement, the government will pay the consortium a total net present value of $1.87 billion to design, finance, build and operate the Sports Hub over the 25-year tenure. The construction cost of the Sport Hub is estimated to be some $1.2 billion.

 

The Sports Hub, which occupies a 35-hectare site in Kallang, is the first and largest sports facilities infrastructure PPP project in the world.

 

Another organisation set to ride the buzz surrounding the Sports Hub is the Singapore International Hotel and Tourism College (Shatec), which has signed an agreement with the SSH consortium to be the master caterer over the 25-year tenure.

 

Shatec will provide a complete set of lifestyle food and beverage catering solutions for all special events and activities at the Sports Hub.

 

‘As the master caterer, Shatec will be part of all decisions on catering within the hub and will also be the primary operator of the central and satellite kitchens, corporate boxes and hospitality suites,’ Shatec chief executive Steven Chua said. ‘This in turn shall provide our students the best exposure to the spectrum of hospitality and tourism opportunities.’

 

The consortium’s comprehensive sporting calendar guarantees at least 90 event days at the National Stadium and 46 days at the Singapore Indoor Stadium. Given the number of events to be held here, the demand for F&B catering at the Sports Hub is expected to be robust, he added.

 

To ensure timely and responsive on-site management operations, Shatec’s F&B services will be delivered under a new corporate subsidiary, which will have overall purview over the entire hub except for the retail and commercial areas.

 

Source: Business Times

STEADY CLIMB, NOT SPRINT

Prices still likely to rise but…

 

STEADY CLIMB, NOT SPRINT

 

Buy now or wait? House hunters unsure which way prices will go

 

WITH a possible recession looming in the US, and the injection of more HDB flats and private properties into the market this year, will property prices take a breather or even head south?

 

By Desmond Ng

 

 

22 January 2008

 

WITH a possible recession looming in the US, and the injection of more HDB flats and private properties into the market this year, will property prices take a breather or even head south?

 

Those scouting for a house now will want that to happen.

 

Take communications manager Mah L C for example. For this 31-year-old, hunting for a flat has been a trying exercise for the last three months.

 

Ms Mah is getting married in March to a financial adviser.

 

The couple’s combined income has busted the $8,000 ceiling for subsidised housing, which means their options are limited to the HDB resale market or private housing.

 

But in today’s market, if you’re not cash-rich, you can forget about the HDB resale market given the high cash-over-valuation (COV) premiums sellers are asking for.

 

That’s the cash difference between the property’s valuation and the asking price.

 

Ms Mah, who is currently living in a four-room HDB flat with her parents in the central area, wants to buy an HDB flat near her parents for convenience.

 

She said: ‘Ideally, we’ll like to buy a new flat but we can’t because we bust the ceiling. But in the resale market, the premiums (COV) that sellers are asking for are just crazy. In the central area, be prepared to pay at least $50,000 above valuation.

 

Ms Mah said they’ve viewed other resale HDB flats in the central area, all with high COVs.

 

So the couple is now thinking of renting a flat first.

 

Some may say they are choosy but they have since given up their home search and are thinking of renting instead.

 

She said: ‘Rents may be high but it’s better than forking out such a huge cash outlay. We may perhaps rent for a year or two and wait for prices to stabilise or drop.’

 

This wait-and-see strategy is a gamble on property prices dipping in the next two years.

 

Barring any unforeseen external events, a price drop in the property market is quite unlikely, said industry watchers.

 

The general consensus is that property prices are likely to still head upwards, but at a more gradual pace.

 

ERA assistant vice-president Eugene Lim explained that the property market is driven by internal and external events.

 

Internal factors such as the demand and supply of homes, and excessive speculation will affect prices.

 

Mr Lim added that the Government is trying to contain the situation by supplying more flats and providing enough housing for everyone.

 

National Development Minister Mah Bow Tan announced last November that 7,000 new flats will be launched for sale in the next few months.

 

Said Mr Lim: ‘In order for the prices to drop, the supply must outstrip demand. But demand is expected to go up because the population is increasing. Economically, we’re stable and this will generate more confidence and more jobs.

 

‘Yes, more new flats will be released but it’s not meeting immediate needs and one must wait for at least three years for these flats to be built.’

 

WHY IT WON’T BE LIKE 2001

 

He doesn’t foresee a supply glut in the property market, even though more new private properties will also be completed in the next few years.

 

Mr Lim, however, thinks sellers would be more realistic about their pricing in the next few months.

 

And even if the US slips into a recession, it may not necessarily affect us in a big way like it did in 2001, which was centred on the IT industry, according to a report in The Business Times earlier this month.

 

A recession this time will not be IT-industry-specific and the Singapore economy is now more diversified and resilient, with domestic demand growing strongly, helped by large projects such as the integrated resorts (IR).

 

Continued strong growth in China and India will also help provide a cushion, according to that report.

 

Certainly, the upcoming IRs and Formula One will translate into more visitors and also more demand for housing here, said Chesterton International’s research director Colin Tan.

 

He said: ‘If you’re buying a place to live in, buy something you can afford so that there’s no fear of defaulting on your mortgage.

 

‘Property is a cycle. The question is when you want to exit the market? If you exit during the bull run, you’ll be fine.’

 

For those unwilling to fork out a premium for a place today, they can always rent a place but make their money grow by investing.

 

Said Mr Tan: ‘Hedge yourself by buying blue-chip property stocks. If the market is good, your stock value will increase.

 

‘If the market is bad, you’ll be able to take advantage of weak prices (by buying a property).’

 

Source: The New Paper