NATIONAL Development Minister Mah Bow Tan yesterday addressed the issue of flat owners up in arms over the fact that new rental flats will be built in their neighbourhoods.

Appealing for their understanding, he said: ‘In land-scarce Singapore, give and take is often necessary to make space for the different groups in our society.’

He was replying to Madam Ho Geok Choo (West Coast GRC) during the debate on his ministry’s budget estimates.

She brought up residents’ grievances that they had not been consulted about the move to build rental flats in their neighbourhoods.

Mr Mah said residents were informed of construction works before these started.

‘As far as possible, HDB will minimise blockage and inconvenience from the rental blocks. As for concerns about resale prices, HDB’s data suggests that rental blocks alone do not affect prices,’ he added.

Responding to demand from Singaporeans, the Housing Board recently decided to build 7,000 more rental flats in various parts of Singapore over the next three years.

This will increase the supply of rental flats to 50,000 units.

Combined with changes to eligibility rules, the increased supply will halve waiting time for such flats – from 21 months a year ago to 12 months now.

This way, the Government ensures that the truly needy get rental flats faster, Mr Mah noted in response to Mr Teo Ser Luck (Pasir Ris-Punggol GRC) and Madam Ho.

Mr Teo recounted the story of a couple with two young children – aged two and four – who appealed to him for help. They lived in a room in a friend’s house, but because their friend needed the room back, they ‘were extremely anxious and helpless’ while waiting for a rental flat to be allocated to them.

Said Mr Teo, who is also Senior Parliamentary Secretary at the Ministry of Community Development, Youth and Sports: ‘Time is of the essence… While they are waiting, they can’t afford to live anywhere else, (so) they end up living outdoors.’

Mr Mah assured MPs that the HDB ‘has a heart’ and will help those in genuine need.

But he also pointed out: ‘The problem is that sometimes people take advantage of HDB’s kindness.’

He cited the case of a resident who did not pay his loan instalments for three years, resulting in the HDB having to acquire the flat back from him.

‘There is a limit to compassion. Decisive action is needed to prevent households from spiralling further into debt, but HDB will always ensure that they have viable housing options,’ said Mr Mah.

Source: Straits Times, 6 Mar 2010

MND draws over 40 queries from MPs, more than any other ministry

THE suggestions flew fast and furious yesterday as MP after MP rose in Parliament to speak on the hottest topic of the day: How to make housing more affordable and better for Singaporeans.

Proposals ranged from ideas already much-discussed – such as extending the minimum occupation period for HDB flat buyers to discourage speculation – to the new and extreme, including disallowing private property owners from buying HDB flats altogether.

A total of 15 MPs took turns to question the Ministry of National Development (MND) about its policies yesterday as Parliament kicked off the Committee of Supply debate, in which each ministry has to defend its spending plans for the coming financial year.

Another seven MPs are scheduled to query the MND on Monday when the debate resumes.

In all, the ministry, which covers housing and land-related matters, attracted more than 40 queries from MPs – more than any other ministry in the entire Committee of Supply debate.

Some of the most radical recommendations yesterday came from Mr Hri Kumar Nair (Bishan-Toa Payoh GRC), who proposed removing the income ceiling for HDB flat buyers so that any Singaporean who wants to buy a flat can do so.

However, private property owners should be forbidden from buying any HDB flats at all, he added.

To prevent speculation in the private property market, Mr Nair also suggested that foreigners who resell their property within three years of buying it should pay a tax on any profit they make.

Buying and selling the option to purchase a property should also be discouraged by making these options non-transferable or taxing gains made from these transactions, he said.

Mr Nair and Mr Cedric Foo (West Coast GRC) also mooted the idea of building a ready supply of new flats for buyers with urgent needs, rather than allocating units only under the Build-To-Order (BTO) scheme.

Alternatively, Mr Foo added, HDB could start building BTO flats sooner: after 50 per cent of the units had been booked, rather than the current 60 to 70 per cent of bookings required.

In response, Minister for National Development Mah Bow Tan said it is better to build flats based on real demand as demonstrated by actual bookings.

‘If we built ahead of demand, we could end up with a large stock of unsold flats, as in the early 2000s,’ he said.

He added that the waiting time of ‘three years plus’ for a BTO flat is no different from that of private developments. ‘For those who cannot wait, they can buy from the resale market immediately, but at a premium for speed and choice.’

Mr Mah also addressed Mr Liang Eng Hwa’s (Holland-Bukit Timah GRC) query about the BTO system needing to be tweaked as many applicants drop out of the queue when they cannot get their ‘choice’ flats.

While the system may not be ideal, it is a fair one, he said. ‘There will be some flats which are not ‘ideal’… We cannot promise everybody a flat of their choice.’

MPs including Dr Lim Wee Kiak (Sembawang GRC), Madam Ho Geok Choo (West Coast GRC) and Mr Masagos Zulkifli (Tampines GRC) had also raised concerns about speculation in the HDB market and high cash-over-valuation (COV) levels.

To this, Mr Mah stressed that ‘the HDB resale market is a free market, and we should keep it that way’.

He said the COV is the result of negotiation between willing parties and reluctant buyers can always walk away.

In any case, Mr Mah added, the bulk of resale flat buyers are citizens who do not own private property, and ‘there is no evidence’ that specific buyer groups such as permanent residents or private property owners are driving up prices.

Source: Straits Times, 6 Mar 2010

one-north site may turn into hedge-fund capital

THE cluster of 16 black-and-white bungalows in Buona Vista was once home to British troops stationed in colonial Singapore. But the rustic area, called Nepal Hill, may soon turn into the country’s newest financial district.

JTC Corporation – the agency developing and marketing Nepal Hill – said in a statement yesterday that it is in talks with investment managers about the site.

‘Nepal Hill is one of the heritage areas within one-north,’ it said. ‘It is also an alternative location for investment managers which is envisioned to strengthen Singapore’s value proposition as a premier asset management centre in Asia.’

Bloomberg News reported yesterday that Singapore is planning to create its own hedge-fund capital modelled after Greenwich, a town in the United States with a high concentration of hedge funds.

Hedge funds are large privately-run investment funds that have increasingly dominated the global investment scene in recent years.

Bloomberg said the Monetary Authority of Singapore and JTC Corp had courted fund managers by inviting them to visit Nepal Hill at a networking event in January.

The site is part of one-north, JTC Corp’s 200 ha innovation and research hub, which includes science and technology research centre Fusionopolis and biomedical hub Biopolis.

JTC Corp said two years ago that the bungalows – commonly referred to as black-and-whites due to their white-washed walls and black frames – were being refurbished for ‘adaptive use’.

But the rare and lush enclave, just a 14-minute train-ride from Raffles Place and across the road from trendy dining spots in Rochester Park, could offer hedge funds and other high-end financial service providers an alternative to concrete skyscrapers downtown.

With Asia leading the global economic recovery, Singapore continues to be an attractive location for firms looking to expand in the region.

The proposed increase in regulation by Western authorities, coupled with tax and regulatory incentives here make it more appealing for hedge funds to operate in the Lion City.

Details are still sketchy as far as rental rates and how the site will be further developed are concerned, but the response from hedge funds have been mixed so far.

Aisling Analytics’ Michael Coleman told Bloomberg his firm will look at Nepal Hill as a potential location when its lease at Suntec City is up for renewal. ‘I’ve visited and think it’s a very interesting development and a great alternative to a traditional office,’ said the hedge fund managing director.

‘You’re surrounded by greenery, have your own garden to enjoy and the area is rapidly developing.’

However, Man Investments’ executive director Timothy Peach, who has also visited the site, feels that Nepal Hill would not work for his company, which is based at One George Street. ‘Almost all of our clients are based in the CBD, and we have to be close to them,’ said Mr Peach, who lives in a black-and-white off Tanglin Road.

‘It’s a nice little idea but definitely not suitable for us because we’re one of the largest hedge fund companies in the world employing some 1,500 people globally.’

Source: Straits Times, 6 Mar 2010

TENGAH and Simpang might be the next townships to be developed, Minister for National Development Mah Bow Tan said yesterday.

‘Flat buyers need not fear that there are not enough flats,’ Mr Mah said. ‘When Punggol is fully built up, we will consider building in new areas such as Tengah and Simpang.’

The two areas – Simpang in the north-east, and Tengah in the west – were fielded as potential development sites as early as the 1990s.

Simpang town first made its appearance on the Urban Redevelopment Authority’s 1991 Concept Plan, where it was mentioned as one of the next possible housing estates in the same breath as Punggol, Sembawang, and Sengkang.

Simpang town is located on the coast, bounded by the Strait of Johor to the north, Sembawang town to the west, Yishun town to the south and the mouth of the former Sungei Seletar to the east.

In the URA’s Simpang development guide plan, the area was meant to be a waterfront town, featuring waterfront homes and sea sports facilities.

There were even plans for a light rail system through the area.

These grand plans were evidently shelved, however, as the area remains a mixture of forest and swamp. The Simpang training grounds were at one point in use by the Singapore Armed Forces artillery as a training ground.

There have been fewer designs on the area at Tengah – bounded by Brickland Road, the KJE, PIE and Bukit Batok Road.

Today, the forested piece of land remains an excellent source of wild durians.

However, a spokesman for the Ministry of National Development stressed that there are no concrete plans to develop the areas yet. He stressed that Mr Mah highlighted the two areas only to demonstrate the adequacy of housing space.

‘(The) towns will only be developed at the appropriate time when there is sufficient demand,’ said a spokesman for HDB. ‘There was no prior commitment to develop both towns.

Source: Straits Times, 6 Mar 2010

NATIONAL Development Minister Mah Bow Tan spent some time in Parliament yesterday addressing popular misconceptions about Singapore’s public housing market.

MYTH: There are not enough HDB flats to meet demand.

HIS RESPONSE:

# The HDB released 13,500 new flats last year and will release another 12,000 or more this year. This is more than the total number of flats in Clementi or Jurong East (about 23,000 flats each).

# The massive oversubscription rates for new flats are misleading. That is because half the number of flat applicants choose not to book a flat when invited to do so. Many say this is because they could not get a flat of their choice, yet in recent selection exercises, one-third rejected flats on the first day of selection, when all the flats were available.

# Some first-time buyers have complained that they have tried repeatedly to get a flat to no avail. But when the HDB reviewed 477 such cases in the last six months, it found only 29 appeals (6 per cent) were genuine.

CASE STUDY: Mr C complained about his lack of success in getting a flat. The HDB’s checks found that he had submitted four applications, three of which were in highly popular mature estates. In six months, he consecutively rejected three offers of flats: one offer of 121 flats in Punggol/Sengkang because he had been ‘targeting a unit in Buangkok’; another offer of 143 flats in Punggol because ‘the units left are facing the mosque’; and a third offer of 14 flats in Serangoon, Yishun, Ang Mo Kio, Tampines and Woodlands because these were not his ‘choice’ flats.

MYTH: HDB flats are unaffordable.

HIS RESPONSE:

# On top of the CPF Housing Grant of $30,000 or $40,000, there is an Additional Housing Grant (AHG) for lower-income families of up to $40,000. As of Jan 31, the Government disbursed more than $330 million in AHG to more than 20,000 families.

# The median house price is 5.8 times the median household income in Singapore. In comparison, the ratio is 7.1 in London and 19.8 in Hong Kong.

# The average mortgage payment for new flats in non-mature estates sold in 2009 was 22 per cent of monthly household income. This is well below the affordability benchmark of 30 per cent to 35 per cent.

# Four out of five Singaporean new flat buyers service their housing loans from CPF savings, without any cash payment.

CASE STUDY: Mr and Mrs S, with a $4,500 monthly income, bought a four-room flat in Punggol for $297,900. They received $10,000 in grants and took a concessionary loan of $268,100 (90 per cent of the price) from the HDB. The couple’s monthly instalment is $1,073, or 24 per cent of their income. They can use $1,035 from the CPF to service the mortgage and end up paying only $38 monthly in cash.

MYTH: PRs push up prices.

HIS RESPONSE:

# The median cash-over-valuation (COV) paid by permanent residents have been the same as the median COV nationwide for the last two quarters.

# Cases of PRs paying high COV are the exception. Of 37,205 resale transactions in 2009, 58 cases had COV exceeding $70,000. Of this, only eight (14 per cent) involved PRs.

MYTH: Private property owners push up prices.

HIS RESPONSE:

# Their number is not large enough to push up prices. Of the 58 resale transactions last year with COV exceeding $70,000, only 11 cases (19 per cent) involved private property owners.

MYTH: Subletting of HDB flats is rampant.

HIS RESPONSE:

# Of the 682,000 flats that have fulfilled current Minimum Occupation Period requirements, only 3 per cent are sublet. This suggests most flat owners are buying their flats for occupation, and not rental.

Source: Straits Times, 6 Mar 2010

Visitors get $15 voucher during early phase to offset any inconveniences

DINOSAURS, green ogres and a talking donkey are getting set for March 18, when Singapore’s Universal Studios theme park throws open its doors to the public at 8.28am.

Tickets for the park’s debut will go on sale from next Wednesday, starting at 9am.

Although all 19 attractions and shows – including the world’s tallest duelling roller coaster and rides inspired by the Jurassic Park and Shrek movies – will be up and running, Resorts World Sentosa (RWS) said it may stop and close certain attractions at any time to make adjustments during the initial opening phase.

To make up for such inconveniences, RWS will give visitors $15 in retail and food and beverage vouchers.

It is unclear how long this preview phase will last, but resort spokesman Robin Goh said the park will take as long as required to fine-tune the attractions to its satisfaction.

Such previews are not uncommon. In 1999, Universal Studios Florida held a two-month soft opening to give management time to work out teething problems as park-goers tried out the rides.

The Singapore park, the second Universal Studios in Asia after Japan, is prepared to handle the crowds.

RWS is limiting the number of tickets on sale for this period to prevent a repeat of the problems that ensued when the casino opened during Chinese New Year.

At the time, visitors complained about such things as the limited number of toilets, lack of 24-hour dining facilities and confusion over suitable attire for the gaming floor.

Mr Goh said: ‘Unlike the casino opening where there was no way of pre-empting the number of visitors, for Universal Studios Singapore, we will know exactly how many visitors to expect for the day from our ticket sales.’

RWS would not say exactly how many tickets will be on sale.

The long-awaited announcement made yesterday concluded RWS’ Phase One launch, which kicked off with four hotels opening on Jan 20, the retail strip on Jan 31 and casino on Feb 14.

Another two hotels with 500 rooms, an oceanarium, a maritime experiential museum, and a water theme park and spa will open in Phase Two.

Mr Goh said work has commenced but there is no date yet for this opening.

RWS is one of two casino-resorts awarded in 2006.

Its competitor, Marina Bay Sands, announced last week that it will open its first phase on April 27, followed by a grand opening on June 23.

With the theme park’s opening given the green light, travel agents can now begin selling travel packages.

CTC Holidays spokesman Alicia Seah said: ‘This is the date we have all been waiting for.’

Now that the date is out, all travel agents need to do is to follow up on the hundreds of enquiries made and confirm bookings.

City DMC general manager Wendy Leong said she has many customers who are putting off their visit to Singapore until they know the theme park’s opening date.

Tickets for the theme park have to be purchased in advance – either online, through phone bookings or from the Universal Studios box office on Sentosa.

Prices start from $66 for a one-day weekday pass for an adult. The same pass for a child aged 12 and below will cost $48.

Source: Straits Times, 6 Mar 2010