THE Housing Board will conduct routine inspections and seek feedback from residents and tenants to enforce a new rule on sub-letting.

It yesterday reminded owners that those who do not comply with the rule face a $3,000 fine.

Those who repeatedly fail to comply could also have their flats seized by the board.

Responding to queries from The Straits Times, an HDB spokesman said those who sub-let their flats without registering with the board will be guilty of ‘unauthorised use of the flat’.

The HDB announced on Tuesday that owners of flats will have to register with the board within seven days of renting out a room.

The new ruling also requires home owners to provide a whole host of information, including details of their sub-tenant, the conditions of the sub-letting agreement, and even his job.

Other information required includes the rental charged each month, and how long the tenancy will last.

The rules apply to tenancies that begin after Feb 1. Those already sub-letting their flats have a six-month grace period to register with the HDB and provide the information needed.

The measure was announced after Parliament passed the Moneylenders (Amendment) Bill on Tuesday, introducing tougher penalties to curb the worsening loan-sharking problem.

Illegal moneylending and harassment cases have risen rapidly, with 18,645 cases reported last year, up from 11,879 in 2008 and 10,221 in 2006.

The new HDB rule seeks to better protect residents who fall victim to harassment by illegal moneylenders when borrowers who rent a room and move out give their old addresses to loan sharks.

Senior Minister of State for Law and Home Affairs Ho Peng Kee told Parliament the new rule would help trace borrowers who move from place to place to avoid loan sharks, leaving innocent new home owners or sub-tenants to be harassed.

An HDB survey in September 2008 showed there were about 45,000 flat owners who rented out rooms.

Reacting to the new rule, HDB home owner Sara Nadeson, 34, who is renting out a room for the first time, said she would comply.

She said she does not want unpleasant surprises, such as the dreaded O$P$ – loan shark shorthand for ‘owe money, pay money’ – spray-painted outside her home.

Others, however, felt the detailed information they will have to supply the HDB made the new rule too onerous to comply with.

Some said they were willing to risk the $3,000 fine if their tenants were friends or people they knew well.

The owner of a four-room Jurong flat said: ‘My tenant is a personal friend, and I have confidence that he will not get me in trouble as a result of loan-sharking activities.’

However, the HDB spokesman cautioned home owners against taking a cavalier attitude to the new rule.

Mr Baey Yam Keng, an MP for Tanjong Pagar GRC, said it would ‘complete the chain of information’ needed by the authorities to crack down on loan shark activities.

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Details required

NEW information required by HDB of flat owners who sub-let rooms:

Sub-letting start/expiry dates
Number of rooms sub-let
Rental per month
Name of sub-tenant
Household structure of sub-tenant (family or individual)
Identification number of sub-tenant
Nationality, citizenship and ethnicity of sub-tenant
Work pass type (for example, work permit, employment pass)
Work sector (service sector, construction, manufacturing, etc)

Source: Straits Times, 14 Jan 2010

I REFER to the current discussion on the relevance and fairness of the $8,000 income ceiling for buying a Housing Board flat.

The HDB should refine the calculation of the ceiling as it does not factor in the greater financial burden faced by a larger family, given the same income level.

Consider an example of two families, each with a similar combined income of $8,000.

One couple has four children while the other has a single child. The family with four children obviously faces a heavier financial load and may have a greater need for a flat, perhaps a larger one.

A better formula is a ceiling of total household income divided by the number of direct family members.

For example, the Housing Board could use a per family member income ceiling of, say, $3,000 to qualify for a flat.

This formula could also be calibrated to include parents who do not own their own property and live with the applicants.

The Ministry of Education uses the same approach to decide school fee subsidies.

The current flat rate ruling exposes the formula to more debate over its fairness, and discourages Singaporeans from having more children as HDB flats become more expensive or are beyond their means.

Xavier Chua

Source: Straits Times, 14 Jan 2010

MY RECENT experience to refinance my home loan was exasperating. Through a broker, I explored the best offers and settled on United Overseas Bank (UOB).

The UOB officer was young and eager and offered us a letter of offer (LO) in July last year, four months before the expiry of my existing loan’s lock-in period.

In mid-November, the bank said my loan would be released later that month. However, in late November, my lawyer told me the bank’s lawyers were unable to release the loan based on the LO because the loan structure was incorrect.

I had to come up with $140,000 in cash to continue, failing which UOB would have to apportion the full amount into housing loan and term loan, effectively changing the terms of the LO.

I agreed to amend the LO but was shocked and disappointed that the amended LO was at a higher rate in the third year and I had to bear the cost of the amendment.

I insisted that the rates, terms and conditions should be the same as the original LO. Reluctantly, the bank agreed to change the rates. However, after pursuing this issue at the next level, it still insisted on charging me $200 for the amendments.

I was then advised that the loan would be disbursed last month, but again it did not happen.

The experience has been frustrating and infuriating, and the intra-bank finger pointing over whose fault it was has not helped.

I am stumped and cannot decide whether to proceed.

The issue boils down to the bank having poor knowledge of its product. It failed to verify internally the terms of its LO to the extent that it cannot fulfil some of these terms. Rates and terms and conditions in the LO are changeable and so create unnecessary doubt and worry in the customer.

Worse, there seems to be neither regret nor apology to the customer for an oversight.

As a customer, the episode has made me feel small, vulnerable and undervalued.

Han Chao Juan

Source: Straits Times, 14 Jan 2010

Foreigners again look to buy homes on the island as the economy improves

AFTER a muted 2008, property sales at Sentosa Cove picked up again in 2009 as buyer interest returned to the high-end and luxury segments of Singapore’s property market.

According to data compiled by Savills Singapore, 125 non-landed and 33 landed homes were sold on the island in 2009, up from 67 non-landed units and just five landed homes in 2008.

And more homes worth more than $10 million apiece were also sold on the island last year. Savills’ data shows that 30 homes worth $10 million and more were sold at Sentosa Cove in 2009, compared to just one such property in 2008 and 15 during the height of the property boom in 2007.

Developers and analysts say that with the global economy picking up, foreigners are once again looking to buy properties on the island.

Sentosa Cove is the only place in Singapore where foreigners can own landed property without special permission.

‘Sentosa Cove with its unique lifestyle offerings has already attracted a strong following of high net-worth individuals from around the globe,’ said DTZ managing director Margaret Thean.

She noted that the recent sales of Malaysia-based YTL Corporation’s Kasara project at Sentosa Cove demonstrates the optimism of market sentiment and confidence in Singapore’s luxury property market, which is expected to be further strengthened with the completion of the developments around the Marina Bay Financial Centre and the two upcoming integrated resorts.

YTL said last week that it has sold six of the 13 villas at Kasara at prices ranging from $14 million to $22 million. This works out to about $1,600 per square foot on average. Buyers included foreigners from Asia-Pacific and Europe.

The improved sentiment means that potential buyers can expect project launches on the island soon. City Developments is expected to launch its 228-unit luxury project The Quayside Collection soon.

The property group last year announced that it will delay launching the project due to the subdued property market and global economic uncertainty but will proceed with construction.

And Ho Bee Investment could also launch its two remaining Sentosa Cove projects later this year. The group has the 151-unit Seascape as well as Pinnacle Collection, which has some 280 apartments in all, left in its portfolio.

Source: Business Times, 14 Jan 2010

CBRE data shows over 40% of homes will be launched in core central region

DEVELOPERS are expected to push out a slew of high-end and luxury projects in 2010 as buying momentum starts returning to these segments of the property market.

Data from CB Richard Ellis (CBRE) shows that of the 7,975 landed and non-landed homes that are likely to be launched in 2010, more than 40 per cent of them are in Singapore’s core central region (CCR), which includes the prime Districts 9 and 10, the financial district and Sentosa Cove.

A total of 3,469 homes will be in the CCR. Another 3,071 units are in the outside central region, which is a proxy for suburban mass-market locations. The remaining 1,435 homes are in the mid-tier rest of central region.

In contrast, most private home launches in 2009 were in the mass market.

‘The first half of 2010 will see a wider spread of project launches from mass market, to city fringe and to prime locations,’ said Joseph Tan, CBRE’s executive director of residential.

‘A lot of developers did not launch or re-launch their high-end and luxury projects last year as prices were down,’ said Cushman & Wakefield Singapore managing director Donald Han.

‘They were holding onto their projects because they could afford to. Now, with prices beginning to climb, we can expect more launches in these segments.’

According to Goldman Sachs, luxury homes prices here are still some 19 per cent below their 2007 peak, while prime and mass market home prices are 8 per cent and 4 per cent lower than their previous peaks respectively.

However, it is unclear if the take-up for luxury homes will be as strong as that seen during the 2007 boom. Back then, sales were fuelled by international buyers. But now, most developers and analysts agreed that foreign demand has not returned as strongly as hoped to the high-end and luxury market.

But sellers are still hopeful that the openings of the integrated resorts will once again kick-start more interest from international investors into Singapore.

The fact that luxury prices are still far from their peaks means that investing in Singapore will once again prove to be attractive to international buyers, Mr Han added.

Said UOB Kay Hian analyst Vikrant Pandey: ‘The growing acceptance of Singapore as a choice destination to live and work will fuel prices further because property prices in Singapore are still significantly lower than those of key gateway cites of Monaco, London, New York, Hong Kong, Tokyo and Moscow.’

There is also a lot of speculation on the ground about how developers will replenish their landbanks once they start selling luxury and high-end homes once again. In 2006 and 2007, a scramble for prime residential sites led to a booming collective sales market.

‘All developers we spoke to are looking to participate in the government land sales for 2010, as land banks have been run down in the strong buying momentum in 2009,’ said Macquarie analysts Elaine Cheong and Soong Tuck Yin in a Jan 6 note.

‘A few have lost out in 2009 tenders due to intense competition. We see overpaying for land as a key risk for developers in 2010.’

Some analysts believe that collective sales, which witnessed a slump in 2008 and 2009, with only one transaction compared to 116 in 2007, could stage a comeback in 2010 if the strong buying sentiment in the property market continues well into the year.

‘We expect en bloc sales to make a comeback on the back of: rapidly falling inventory levels among developers; the H1 2010 government land sales programme (which) mainly targets the mass-market segment; a recent surge in high-end transactions; moderation in price expectations by collective sale home owners; and the transformation of Singapore into a top global city with the opening of the integrated resorts,’ said UOB Kay Hian’s Mr Pandey.

But Goldman Sachs said that the en bloc fever is not likely to return anytime soon.

‘Developers’ demand concerns still trump the need to replenish land banks, suggesting a new wave of en-bloc sales is not yet in sight,’ said analysts Paul Lian and Rishab Bengani yesterday.

‘As a group, developers made $2.5 billion in land purchases in 2009, flat over 2008, and some 75 per cent below 2006 peak levels, despite record take-up in 2009.’

Source: Business Times, 14 Jan 2010

5-10% rise seen in high-end residential prices; slight drop expected in the number of GCB transactions

PRICES of luxury and high-end homes in Singapore started inching up in 2009, but analysts and developers here are confident that there is room for further growth.

Developers here are unanimous in agreeing that mid to high-end residential prices will climb in 2010. And among property consultants, the expectation of price growth ranges from 5 to 10 per cent for the most part, although some are predicting increases of as high as 30 per cent.

Data from Savills Singapore shows that the prices of high-end homes on the mainland in Districts 1, 9, 10 and 11 (which include Shenton Way, Orchard, Holland, Newton and Bukit Timah) have been climbing since Q2 2009.

The average unit price of high-end homes fell from $1,621 per square foot (psf) in Q2 2008 to $1,174 in Q1 2009, the property firm said. But prices have since rebounded and the average unit price of high-end homes was $1,543 psf in Q4 2009.

And they still have some way to go.

‘We are very positive on the luxury sector,’ said Savills Singapore managing director Michael Ng. ‘The segment is still a laggard (in terms of prices) compared to the mass and mid-range markets.’

Echoed OCBC Investment Research analyst Foo Sze Ming: ‘We reiterate our positive view on the high-end property segment as it is likely to benefit most from the opening of the two integrated resorts this year.’

However, estimates for how much prices in this segment are expected to climb vary greatly, with predictions ranging from 5 per cent to 30 per cent.

Over the last year, prices of mass and mid-range private homes have caught up with and even surpassed that seen during the previous peak. But for the high-end/luxury segment, prices are still some 25-30 per cent off their peaks, Savills’ Mr Ng said.

‘We are confident that (high-end/ luxury) prices will move as much as 30 per cent over the next 12-24 months,’ he added. ‘We have already seen this happen in the mass market, over just the last nine months.’

Other estimates are more modest. Goldman Sachs yesterday raised its forecasts for high-end property prices, and now expects high-end prices to rise 10-15 per cent. The bank’s research shows that by segments, luxury home prices are 19 per cent below their 2007 peak, while prime and mass-market home prices are respectively 8 per cent and 4 per cent lower than their previous peaks.

‘We expect the high-end to lead for the better part of 2010; there is still positive carry in rental yields, as rents hold steady even as consensus braces for a 10 per cent decline,’ said analysts Paul Lian and Rishab Bengani. And as the volume of total home sales falls, the high-end and luxury markets are expected to make up a larger piece of the pie.

On a yearly basis, 2009 saw the second highest number of new private home sold. Developers sold around 14,500 new homes last year – second only to the record take-up of 14,811 units in 2007.

But in spite of the high volume of new sales last year, caveats lodged show that the total value of the homes sold is only around 60 per cent of that in 2007. The lower quantum was attributed to the dominance of mass-market and mid-tier homes that were sold in 2009, compared to 2007 when high-end homes stole the limelight.

This is expected to change in 2010. Analysts reckon that the take-up in 2010 will moderate to 8,000-10,000 units. But the activity is expected to move into the high-end and luxury segments. Mr Ng estimates that the volume of high-end and luxury home sales could climb by 50 per cent.

The year began well last week, with property giant CapitaLand reporting that it has sold 60 apartments in the 165-unit Urban Suites condominium in the Cairnhill area, at prices ranging from $2,400 to $2,700 psf.

In line with the rising interest in luxury homes, sales of good class bungalows (GCBs) also picked up in 2009.

According to CB Richard Ellis, the average price on a psf basis reached a high of $826 last year, up from $820 in 2008 and $681 in 2007.

And transaction volumes have also started picking up.

Data from Savills Singapore shows that 74 GCBs worth a total of $1.3 billion changed hands in 2009. This was a up from 43 GCBs and $745.7 million in 2008.

Most of the transactions last year took place in the second half of the year – 35 GCBs were sold in Q3 and another 15 were sold in Q4 2009.

‘A lot of people jumped into the GCB bandwagon from April last year,’ said Savills Singapore’s director of investment sales and prestige homes Steven Ming. ‘People sidelined themselves from the GCB market in 2008 in anticipation of a further slowdown in the economy. So there was a backlog of demand.’

Sales were also boosted by a low interest rate environment.

For 2010, Mr Ming expects a slight drop in the number of GCB transactions, and estimates that 60-80 bungalows will be sold: ‘We are expecting volumes to slow in 2010 because those investors who wanted to buy in the last two years would have bought last year.’

As for prices, no big surges are expected either, with Mr Ming predicting at most a 5-10 per cent climb for the GCB market in 2010.

Source: Business Times, 14 Jan 2010

They are in the same estate, but the price range for similar sized HDB flats in some estates could vary by about $80,000 to $100,000.

In HDB’s annual report for 2008/2009, published figures show that the price range of new four-room flats offered in Punggol was $223,000 to $327,000. The difference of $104,000 meant that the price of flats in the highest price range was 46 per cent more than the price of the lowest priced units.

In Sengkang, the difference was $85,000 or 44 per cent, with flats ranging from $190,000 to $275,000.

These two areas show the largest difference in prices, according to the table published by HDB.

HDB states in its annual report that the price differential may not be directly comparable as “it may be affected by different attributes of flats offered such as location, design, storey-height, orientation, etc”.

Mr Tan Kin Lian, president of the Financial Services Consumers Association of Singapore (FiSCA), told Shin Min Daily that he finds the price difference hard to understand. He felt that the price difference for flats in the same area should be about 10 to 15 per cent.

HSR Property director Mr Jeffrey Hong feels that part of the reason lies in fluctuations in last year’s property market, when the beginning of the year saw much lower prices compared to the latter half of the year.

For example, $200,000 to $230,000 was the average price of a four-room flat in Punggol at the beginning of 2009, but by the end of the year, it had risen to about $280,000 on average.

Mr Lim Yong Hock, senior vice president of PropNex told Shin Min that as Punggol and Sengkang are big housing estates, and some parts are not fully developed, thus resulting in large price premiums for areas which are near the MRT stations and town centres.

Source: AsiaOne, 14 Jan 2010

Singapore’s investment property market seems to be shrugging off the global financial crisis and is staging a robust comeback.

Property consultant C B Richard Ellis said Singapore’s investment market performed much better than expected in 2009. It said total real estate investment sales came in at S$10.2 billion.

While the figure is 43 per cent less than the S$17.9 billion number set in 2008, it is still better than an initial estimate of S$1.35 billion at the start of 2009.

But in the fourth quarter last year, total investment sales amounted to S$3.86 billion, a drop of 7.2 per cent from the previous quarter.

CBRE said the dip was due to the residential market taking a breather from the intense activity witnessed in the earlier part of the year.

Separately, property consultant DTZ said Singapore accounted for the bulk of investments flowing into Southeast Asia in the fourth quarter last year. It said 73 per cent of Southeast Asia’s total transactional value of US$2.4 billion was due to Singapore.

DTZ noted that Singapore did well as it is the gateway to the region.

Most of the investments over the period were channelled into the residential sector, followed by the retail sector.

In Singapore, the residential market made up 57 per cent of the transactional value in the fourth quarter of 2009.

DTZ added that the real investment market in the region was driven mainly by domestic firms and private investors.

Source: Channel News Asia, 14 Jan 2010