THE Housing Board is embarking on a review of its rules to ensure that property speculators are not abusing the system – and driving up flat prices.

It will check if any rules are ‘encouraging or allowing’ people to speculate on HDB flats, said National Development Minister Mah Bow Tan.

At the same time, it will step up efforts to make sure people do not get away with abusing the system.
Some disgruntled homebuyers, priced out of a rising market, worry that some HDB buyers are exploiting the rules to try to make a fast profit.

They claim these speculators snap up flats on the resale market and then either rent them out illegally or sell them legally after the stipulated one-year period.

Under HDB rules, citizens and permanent residents who buy resale flats without housing grants or HDB loans must live in the flats for at least one year before selling, or at least three years before renting out the entire flat.
Speaking on the sidelines of a housing conference hosted by the HDB on Wednesday, Mr Mah said these claims were worth checking and he wanted to ensure that such factors were not inflating the market artificially.
He said it would not do if buyers were buying flats because they hoped to make money through flipping or selling the flats later on, or by renting them out without living in them.

He did not know how prevalent such practices were, but added that ‘anecdotally, you do hear cases, so I want to make sure that this is not happening’.

The HDB’s findings will be out in a couple of months, he said.

Industry observers said that if there were speculators, they would be less likely to be flipping HDB flats – reselling them quickly – and more likely to be renting them out.

‘HDB flats in good locations enjoy very high rental yields, up to 7 or 8 per cent. Even if owners are not legally allowed to rent out their whole flat, you hear of creative cases where they do so anyway,’ said ERA Asia Pacific associate director Eugene Lim.

Agents said an owner might lock up a room to make it seem he is still living there, even though he has rented out the entire flat.

Chesterton Suntec International research and consultancy director Colin Tan said this has gone on for years, but these cases were hard to prove and needed a major effort to enforce.

Mr Mah acknowledged that recent housing data had raised fresh concerns about high resale flat prices.

Latest HDB figures showed the median cash amount paid by buyers for resale flats over and above a flat’s valuation, known as Cash-over-Valuation (COV), doubled to $24,000 in the last three months of last year compared to the previous quarter.

Resale flat prices also rose 3.9 per cent in the final three months of last year to hit a fresh record, taking the full-year jump to 8.2 per cent.

Mr Mah said the Government did not wish to meddle in the resale market, and COV payments were part and parcel of the market.

‘If you’re a buyer, you feel anxious, understandably you want prices to be low. But if you’re a seller, you want prices to be high. It’s not possible for the Government to set the resale prices,’ he said.

‘The buyer might be happy today, but tomorrow he’s a seller and if we set the prices of what he wants to sell, he’ll be unhappy.

‘Let the price be set by willing buyers and willing sellers. We don’t, and should not, interfere in the resale market.’

Mr Mah also downplayed the impact of permanent residents on the resale market.

‘Our numbers show that the PRs are buying about 20 per cent, or one in five flats sold. So yes, they do have some impact, but they don’t have such a great impact,’ he said.

Asked if PRs should be restricted from buying in the resale market, Mr Mah said that was not the right thing to do.

PRs also need a place to live, he said, and the solution was to make a clear distinction between Singaporeans and PRs in terms of the grants they get.

Source, Straits Times 29 Januray 2010

THE former sleepy fishing village of Punggol is to undergo a green makeover that will transform it into Singapore’s first ‘eco-town’.

National Development Minister Mah Bow Tan said on Wednesday that the northern coastal town is to serve as a testbed for innovative green technologies.

Testing such technologies at Punggol will allow the Housing and Development Board (HDB) to lower the implementation cost of these solutions and to replicate them across other towns, he added.
The HDB sees Punggol, one of Singapore’s younger towns, as being ideally placed to undergo the planned transformation.

It is already home to HDB’s first green housing project, Treelodge@Punggol, which features solar panels and rainwater recycling.

A waterway is being built at Punggol that will feature green landscapes and bring nature closer to residents.
The town has small, intimate estates featuring common green areas, accessible amenities and a well-integrated public transport network.

The HDB hopes the town’s green living environment will raise awareness of environmental sustainability.
To bring about Punggol’s revamp, it will be working with government agencies and private sector firms in the areas of energy, waste and water management.

The HDB is adopting a three-pronged approach to the development of the eco-town.
This will involve implementing effective urban planning designs that encourage residents to adopt greener lifestyles, using green technologies and educating residents through grassroots events.
Speaking to a 500-strong audience yesterday at an HDB-hosted housing conference at Suntec City, chief executive Tay Kim Poh said the HDB viewed such investment as being in line with its goal of providing a higher quality of life for residents.

‘As the largest developer in Singapore, we have the responsibility to promote environmental sustainability,’ he said.

He added that in recent years the HDB had been driving a number of initiatives to combat climate change.
It is introducing solar systems at four precincts – Tampines, Bukit Panjang, Tanjong Pagar and Marine Parade – with a combined capacity of 600 kilowatt-peak that will be used to offset the energy consumption of the towns.

Mr Tay underlined the importance of constantly rejuvenating ageing towns, and said HDB intends to extend to all towns its Remaking Our Heartland urban rejuvenation programme for public housing estates.

Over the next 20 to 30 years, this massive programme will revitalise older towns and estates, he said.

Source, Straits Times 29 January 2010

LAST December, MP Lim Wee Kiak saw a notice pasted illegally on a wall in his Canberra ward of Sembawang GRC. It was written entirely in the Myanmar language.

Curious, he got it translated. The notice was from a real estate agent offering his services solely to Myanmar permanent residents (PRs) looking for flats here.

Dr Lim was disturbed as he saw this as a tell-tale sign that ethnic congregation of foreigners was beginning in HDB estates.

Such concerns are evidently shared by the Government.

The HDB disclosed on Wednesday that it was considering introducing a separate ethnic quota for PRs to prevent enclaves from forming in estates.

Earlier, Minister Mentor Lee Kuan Yew said at a dialogue that the Government did not want to see new citizens congregate and would disperse them across HDB estates.

Recognition of this as an issue was welcomed by seven MPs who were contacted yesterday about the situation in their wards, and for their views on how such a quota could be implemented.

The HDB has not provided details of what the changes might entail.

But several MPs did point out yesterday that it was through renting of flats in the same areas – and not necessarily buying flats – that PRs have also been able to congregate.

Latest available data showed that as of June last year, only 4.9 per cent of HDB flats were owned by PRs.

Hence, a quota imposed on home-buying by PRs might make little difference.

The Ethnic Integration Policy (EIP), introduced in 1989, aims to maintain a healthy racial mix in housing estates by stipulating maximum proportions for the key ethnic groups.

But MP Charles Chong, whose Punggol Central ward, like all new estates, has seen an influx of foreigners, said the EIP now is too porous for a new generation of PRs.

‘The Indian community is pretty diverse. Sri Lankan is classified as Indian; Bangladeshi, Pakistani, northern Hindi-speaking Indians are all classified as Indians (for purposes of the EIP).’

If there are no sub-divisions, there could arise an enclave, say of Bangladeshis, all staying in the same block or precinct, he pointed out.

The same goes for mainland Chinese, Taiwanese or Chinese-Indonesians, who are all classified under ‘Chinese’.

Dr Lim argued, however, that the important distinction to make is not within ethnic classifications, but between Singaporeans and PRs. He said there are some floors of HDB blocks in his ward where more than half the residents are foreign.

They are a mix of nationalities. So although there is no ‘ethnic’ enclave as such, there is a high concentration of foreigners ‘to the point where Singaporeans feel threatened and become a minority’.

When that happens, then it becomes an issue, he said.

Dr Lim suggested a quota limiting the proportion of PRs in each precinct or block to the proportion of PR homeowners nationwide – or about 5 per cent.

MP Ho Geok Choo – who recalled a visitor describing her Boon Lay ward as being so cosmopolitan that it felt like being overseas – said a quota would help dampen excessive property prices. This would make it more difficult for PRs to artificially inflate prices in certain areas by all snapping up flats there, she said.

It would also assuage the concern of those Singaporeans who feel besieged in their neighbourhood by new sights and smells. On her house visits, every block throws up at least two or three Singaporeans who voice their concerns about this, she said.

But ultimately, a quota on home-buying may not make much of a difference.

Jurong GRC MP Halimah Yacob said more than 70 per cent of foreigners in her Bukit Batok East ward are renting. They rent in the area as it is close to their workplaces in the West.

While it is possible to envision an ethnic enclave of renters, ‘there’s nothing you can do (about where PRs rent)’, she said. The rental market is left entirely to free market forces.

Regardless, director of Dennis Wee Properties, Mr Chris Koh, foresees a big plus if a new quota is implemented: It would puncture the belief that some Singaporeans have that their flats can fetch a higher price if they sell them to PRs.

Sellers who hear that a certain nationality is prominent in the neighbourhood pressure agents to find such buyers, thinking it will mean more profits, he said.

‘If quotas are set… we can tell them, ‘We hit the quota max already and we have to be realistic about the price.”

Source, Straits Times 29 January 2010