They had names like Goh’s Homestay, Lee Boarding House and San Wah Hotel, and helped make Bencoolen Street a haven for backpackers in the 1970s and 1980s.

But they have all closed because of a clampdown by the Urban Redevelopment Authority (URA). The rule states that boarding house permits will be given only to operators that occupy the entire building.

Today, only one cheap-stay place – Hawaii Hostel – remains. Located in a shophouse at 171-B Bencoolen Street, it charges rates starting from $15 a day for a bunk bed.

Instead, mid-range hotels have sprung up along the street. They include Hotel Ibis on Bencoolen, Hotel 81 and even one serviced apartment complex called Somerset Bencoolen. These establishments cater more to businessmen and travellers with some means.

‘We see a new breed of backpacker,’ said Hotel Ibis general manager Puneet Dhawan. ‘Gone are the dirty boots, quick-dry pants and backpacks as luggage.’

Today’s backpacker, hailing mainly from France, Australia and Britain, travel with laptops, iPods and luggage with wheels.

The base price for a room with Internet access at Ibis starts at $138 a night. This is at least 10 times more than the fee at Hawaii Hostel across the road.

A 55-year-old employee of Hawaii, who wanted to be known only as Mr Ng, said its customers are mostly from Indonesia and Malaysia.

Further down the street behind some coffee shops is Peony Mansion. It offers long-term rates at $25 a day for a room. Such rooms are popular with Thais, Vietnamese, Chinese and Filipinos.

It was in one of these rooms that Filipino Pascua Roselyn, 30, was found dead two weeks ago. An Indian national has been arrested.

Asked if the incident has affected business, Mr Elavangovan Valaytham, the director of Al-Jilani Restaurant, a 24-hour coffee shop that has sold Muslim food in the area for the past 20 years, said: ‘Our regular clientele of office workers and students from Nafa still come around to enjoy their food.’

Bencoolen is home to Nanyang Academy of Fine Arts’ (Nafa) three campuses.

However, Mr Elavangovan said, there has been a drop in the number of customers from overseas.

‘Backpackers used to come here, but that was about 10 years ago. It’s much quieter without them around,’ he said.

He noted that guests at the new hotels do not patronise the coffee shop as ‘they usually have their meals catered for them by the hotels’.

Mr Ng at Hawaii Hostel has also noticed the declining interest from Western backpackers. He said many now stay at hostels in Little India.

In the past five years, about a dozen backpacker hostels have emerged across Rochor Canal.

It is a move welcomed by the Singapore Tourism Board (STB).

Said its executive director, hospitality, Mr Justin Chew: ‘The STB welcomes a good mix of accommodation options to cater to the needs of different segments of visitors.’

Source: Sunday Times, 28 Mar 2010

Any newly arrived expat in Singapore invariably finds himself corralled into living in a condo.

The usual chain of events: You move into short-term serviced accommodation, phone a property agent to help you find longer-term lodgings, and usually within a month or so are settled into a suitable home.

The downside to this – which dawned on me pretty soon after we moved into our present flat – is that property agents have a one-word vocabulary when it comes to expats.

Conduct one of those word association games with them, and the word ‘expat’ would most probably elicit a response of ‘condo’.

All the prospective properties they usher you to are expensive condos in central areas – something not particularly surprising, given that agents earn a commission based on the size of the rent. And because you are new to Singapore, you think that this is where every newcomer lives and that condo living is a bit of a fait accompli.

No mention is made of landed properties in less expensive areas, or HDB rentals.

If you were to ask a property agent about such types of accommodation, you would be met with a blank stare. You would be taking the agent into alien territory, prompting him or her to engage in all sorts of patter to steer you back to the script.

No doubt the agents’ car satellite navigation systems are able to guide you from one condo to another in record time – but not to non-expat neighbourhoods.

And not only does an expat have ‘condo’, metaphorically, stamped on his forehead but also the agent would have selected for you condos that are inhabited mostly by people like you.

They will tell you that this condo is predominantly Indian, that one Caucasian, and so on, the hint being that you should go for one that fits your profile.

So you move in, and once the initial novelty of living in a new place has worn off, you realise that the condo is stuffed to the gills with expats. It dawns on you that you are destined to spend the next two years with people broadly similar to you. They are all white-collar workers from Australia, New Zealand, North America or Europe.

There is not a local in sight.

Foreigners who, like me, like to take in the local culture and people when resident in another country will be in for a surprise if they spend much of their time within the gated confines of their lush and well-appointed condo.

If I close my eyes while I sit on the balcony at home, I could just as well be located in an upscale suburb of Sydney, Wellington or Washington, rather than in Tanjong Rhu Road in the East Coast.

The accents of Australians, Kiwis and Americans – plus those of Filipino maids glued to their prized mobile phones – form much of the background hubbub, rather than Hokkien or Singapore English.

This is a pity, because expats can spend years here and not really venture beyond their cultural comfort zone.

This may particularly be the case for housewives left marooned in their mono-culture condos for much of the year.

Sure, they might go out to restaurants and theatres with their friends, but they may never really speak in any significant way to a true local. They will go to the zoo – many times – as well as Sentosa, take a few weekend jaunts to neighbouring countries, play golf, and do lots of shopping.

Then their time here will come to an end, and they will go back to wherever they came from.

Will they really have come to understand Singapore? Will they have any insight into the culture of this place?

They will certainly have no idea of the various uses of ‘lah’, and will have little familiarity with the Yoda-like ability of some Singaporeans to turn what seem like statements into questions by ending them with ‘Is it?’

It is a bit like stating the obvious to say that expats do not mix much with locals.

I know that the Government sets ethnic quotas for HDB blocks, so that every block of flats represents in a small way the multicultural mix of Singapore.

What about something similar for condos?

The writer is a Straits Times copy editor. He has lived in Singapore for two years with his wife and their three-year-old son Alex.

Source: Sunday Times, 28 Mar 2010

Of the many people turning to their MPs for help when they run into trouble paying for their flats, none is a first-time owner living in the home he bought straight from the Housing Board.

Instead, they tend to be people who have bought and sold HDB flats more than once in a bid to make a quick buck.

Prime Minister Lee Hsien Loong highlighted this point at a dialogue yesterday, as he expressed grave concerns over a trend of people trying to sell off their HDB flats to make money, with little regard for where they are going to live next.

Some turn to their MPs to appeal for cheap rental flats. Others turn to friends and relatives. Some even set up camp on the beach.

The beach communities, in particular, have been making the news of late.

During the Budget debate earlier this month, it was revealed in Parliament that many of the families living in tents on the beach had sold their homes and spent the cash. Some demanded rental flats from the Government.

The topic was raised at yesterday’s dialogue at the Grassroots Club by 51-year-old counsellor Tamilarisee Muthu. She said it was worrying to see that some people did not consider the flat a home, but rather as a means to make money.

Mr Lee similarly called it ‘a very bad trend’ and something that the Government was watching closely.

He recounted a meeting with such a person that left a deep impression on him.

A woman had gone to him seeking help buying a new flat. When he asked her why she wanted to buy a new flat, she replied in Chinese: ‘Because I have no money.’

He recalled: ‘Because she had no money, she sold her present flat and took the cash. So she wants a new flat (from the HDB), and a new loan from HDB…She will borrow to the limit all over again, and hopes to pay back some time in the future…It’s a disaster.’

The Prime Minister stressed that Housing Board flats are meant to be long-term assets for Singaporeans, not short-term cash cows.

‘When we help people to own a home, it is really for you for life. It’s an asset as well as a roof, and is meant to see you through into your old age,’ he said.

Flat owners who are elderly could choose to sell their flats and move in with their children, or go into a lease buyback arrangement with HDB to generate a stream of future income, he noted.

Those who are ‘not so old’, however, should think twice before selling. ‘What happens to you, or more importantly, your children – where do they go?’

The Government has recently taken steps to try and counter the very bad trend.

One is to reduce the amount of the loan granted by HDB, at concessionary interest rates, to second- time buyers.

HDB will now take into account how much money is in the owner’s Central Provident Fund (CPF) account, and the profit he made from selling the first flat.

Said Mr Lee: ‘I told the HDB, Make sure that when people sell the flat, you counsel them, tell them if you ever come back and want a loan again, this is all you’re going to be entitled to, please take note.

‘If you think you can’t afford the new home, then please don’t sell your flat.’

Moving forward, he said the Government will channel more of its housing aid via the CPF.

The Additional Housing Grant which lower-income families are already eligible for is an example. These families can get up to $40,000 to help buy a flat, but the money goes into their CPF accounts.

When they sell the flat, the money goes back into the CPF account – where it can help tide them through their old age.

Source: Sunday Times, 28 Mar 2010

Moves to clamp down on illegal subletting of HDB flats should not penalise only the owner, property agents told The Sunday Times.

Tenants and rogue property agents who close these deals should also be held responsible, they suggested.

They were responding to a case that made the headlines two weeks ago in which the HDB repossessed three flats linked to a man, Mr Poh Boon Kay, who also owned five private properties.

It was the most serious case of illegal subletting in the last two years. Only three other flats have been compulsorily acquired by the HDB over that period.

Such owners are not left with nothing. The HDB pays them the difference between the value at which they bought the flat, and the financial penalty.

So in the case of Mr Poh, who the HDB said had bought his flat in 2007 at $150,000, the HDB is considering a fine of $25,000 and returning him $125,000. The flat would fetch about $320,000 in the current market, according to property analysts cited in media reports.

Owners like Mr Poh also have 28 days to appeal to the HDB from the time they are given notice of the repossession of their flats.

In another 52 cases over the past two years, errant flat owners were fined amounts ranging from $1,000 to $21,000.

Subletting HDB flats is seen as a good source of income, property agents noted. For instance, an owner who buys a three-room flat at $250,000 and sublets it at $1,600 a month will receive an annual return of $19,200, or close to 8 per cent of the price he paid for the flat.

This is double the 3 per cent to 4 per cent rental yield for private properties.

A tenant must get HDB’s approval before he sublets his flat. He does not need to do so if he sublets only spare rooms, but he must register with HDB within seven days of subletting the rooms.

An indication of the popularity of subletting is the steady increase in the number of approvals that HDB has granted, from 5,849 in 2003 to 15,344 in 2008, with a slight dip to 15,137 last year.

The HDB told The Sunday Times that while HDB flats are for owners to occupy, it has relaxed its policy over the years to make it easier for owners, including retirees, to sublet their flats to supplement their income.

Doing so also enlarges the rental market for HDB flats, and gives those who are not yet ready to buy a property more rental housing options.

Flat owners must fulfil some criteria, such as living in the flat for up to five years if they sublet the whole flat or continuing to stay in the flat if they sublet spare rooms. (see Subletting rules)

Property agents said some flat owners ignore the HDB’s requirement to obtain its approval because they do not want to become ineligible for government rebates in service and conservancy charges, and they want to avoid paying more in property tax.

The property tax rate is 10 per cent for owners who sublet their whole flat, much higher than the 4 per cent for those who live in their flats, in addition to enjoying property tax rebates.

Of greater concern is the unhappiness among people who believe they are being priced out of the HDB resale market by others with deep enough pockets to buy an HDB flat – not to live in it, but to sublet it and cash out later on.

‘I’ve heard a lot of complaints on the ground,’ said Ms Lee Bee Wah, an MP for Ang Mo Kio GRC. ‘These people are thinking it’s because those living in private estates are allowed to buy HDB flats and jack up prices.’

However, Minister for National Development Mah Bow Tan said this month that the majority of resale flat buyers are citizens who do not own any private property.

Violating HDB rules

The HDB said of the 23,200 owners who are subletting their entire flats with its approval, close to 29 per cent are elderly households.

About 22 per cent moved in with their children, and another 38 per cent moved in with their parents, siblings and other relatives.

Property agents interviewed said private property residents out to make rental income are not the only ones who sublet their HDB flats.

Among them are singles who bought a flat but live with their parents, and young couples who own a new flat but live with their parents because they need their help to look after their children. Others sublet their flats to make ends meet.

In its reply to The Sunday Times, the HDB warned that it has stepped up enforcement against flat owners who flout the subletting rules.

The chief executive officer of real estate agency Propnex, Mr Mohamed Ismail Gafoor, supports the idea that tenants be subject to penalties as well. He suggested that the HDB require owners to show proof of their eligibility to sublet their flats to tenants. ‘If the tenant goes into a contract without verifying the eligibility, the tenant becomes liable too,’ he said.

A spokesman for the Institute of Estate Agents (IEA) noted that many tenants are foreigners working here.

‘They could be warned that if they breach the rules, their work pass might be cancelled,’ said Ms Margaret Chan, IEA’s first assistant honorary secretary.

However, some foreigners may be in a bind because of a lack of cheap rental housing, said Mr Chandran Pillay, senior vice-president at real estate agency Century 21.

‘People have called me saying that even if the flat is not approved for subletting, never mind. They are already here with their wife and children,’ said Mr Chandran, who has rejected such requests.

While low-skilled workers are housed in dormitories, other workers end up sharing a whole flat to split the cost.

The HDB allows up to six people to live in a rented three-room flat and up to nine in a bigger unit. So three couples renting a three-room flat in Ang Mo Kio for $1,800 a month may still pay $600 each in rent.

The HDB did not directly address the question of taking tenants to task when asked.

Property agents are another group that needs to be regulated, said IEA’s Ms Chan. She reckoned that there are still agents who would agree to help an owner sublet his flat even if he does not obtain HDB approval.

Others may advise owners to lock one bedroom and sublet the rest of the flat without the owners themselves living in it, said Prop-nex’s Mr Mohamed Ismail. The HDB said such a practice is disallowed.

Ms Chan noted that these agents have nothing to lose: They do not need an individual licence to operate, so there is no fear of losing one.

Real estate agencies have also said they have too many agents to be responsible for every one of them.

There are about 1,700 licensed real estate agencies, with an estimated 25,000 to 30,000 real estate agents.

The lack of accountability in the real estate industry will soon change, with a new regulatory framework being worked out by the Ministry of National Development.

It has said previously that the framework would require real estate agencies to take greater responsibility for the actions of their agents, with the possibility of agencies and agents facing disciplinary actions for flouting laws and accreditation requirements.

The ministry told The Sunday Times it would share its plans over the next few months.

Source: Sunday Times, 28 Mar 2010

What a difference two new MRT stations make.

For commuters getting off at City Hall station, their long and winding walk to Suntec City, Marina Square and Millenia Walk will soon be over.

The new Esplanade and Promenade MRT stations are at these malls’ doorsteps. These stations are among the 11 on the Circle Line that will open on April 17.

‘It’s a 10-minute walk now from the nearest MRT station at City Hall,’ said a spokesman for ARA Trust Management, the manager of Suntec Real Estate Investment Trust.

Suntec City’s mall and some of its offices come under this trust.

‘With the two new stations, Suntec City is less than a minute’s walk away,’ the spokesman said.

She added that Suntec City is building a sheltered walkway linking Promenade station to an entrance of the mall, where the Carrefour hypermarket is located.

Commuters using the sheltered link can stop for food and drinks at two new outlets, Old Town White Coffee and Japanese food chain Shin Sapporo Ramen, while a new glass facade will make the entrance to the mall more prominent, she said.

Over at Millenia Walk, Japanese mall operator Parco will open its new department store on Wednesday.

Mr Shuichi Hidaka, Parco’s managing director, said accessibility to the Circle Line from Promenade station was an important factor in its choice of Millenia Walk.

The station will also be an interchange for the future Downtown Line that links the north-western and eastern regions to the city centre and Marina Bay, he noted.

The first phase of this line, from Bugis to Chinatown, is due to be completed by 2013.

Parco has lined up fashion shows for the weekend that the Circle Line stations will be opened, and a photo exhibition by Singapore-born, Tokyo-based photographer Leslie Kee later next month.

Also riding on the impending opening of the Circle Line stations is the National Heritage Board, which has several museums in the vicinity of Bras Basah station.

The new station is an alternative to City Hall or Dhoby Ghaut interchanges, which are about a 10-minute walk to the museums.

Entry to the Singapore Art Museum, National Museum of Singapore, Peranakan Museum and Singapore Philatelic Museum will be free next Sunday, the day the Land Transport Authority (LTA) will give commuters a preview of the 11 new stations.

Greater accessibility is one reason more commuters have been taking the Circle Line since five stations from Marymount to Bartley opened in May last year.

The initial figure of 30,000 commuters a day is up, to about 40,000 commuters daily today. This number is expected to grow to 200,000 when the 11 stations from Dhoby Ghaut to Tai Seng open next month, the LTA said.

It indicated that the waiting time for a train on the Marymount to Paya Lebar stretch will be at most 3.5 minutes from 7.30am to 9.30am, and seven minutes at other times.

But it will be a seven-minute wait all day for the section from Paya Lebar to Dhoby Ghaut stations, as the LTA projects much lower usage for this stretch.

Source: Sunday Times, 28 Mar 2010

Last Wednesday, the Institute of Real Estate Studies at the National University of Singapore (NUS) announced that it had formulated an index called the Singapore Residential Price Index (SRPI).

It tracks prices of completed private non-landed homes month on month and will provide owners, investors, banks and property watchers with another source of price data.

Property experts have commented that it will be a more timely index than the quarterly one put out by the Urban Redevelopment Authority (URA).

The SRPI can serve as a reference index that will help expand the suite of property-based financial products, such as property derivatives.

The index is based on the transacted prices of a selected basket that broadly represents the target market. Therefore, landed homes, projects that are more than a decade old, and those that are small, rarely traded or targeted for collective sales, are excluded.

The basket will change every two years to reflect changes in the completed stock of private non-landed homes.

Its initial make-up comprises 74,359 units in 364 projects across 26 postal districts, completed between October 1998 and September last year.

Also, the SRPI takes into account the address, completion date, tenure, leasehold maturity, floor level and strata area of all units in the completed projects in this basket.

The URA property price index, on the other hand, is designed to provide the general public and industry players with a broad indication of price trends in the private residential market, a URA spokesman said.

It is thus compiled based on all types of transactions (that is, new sales, sub-sales and resales) and covers both landed and non-landed private homes.

Also, the URA releases price indices for both non-landed and landed properties.

In particular, URA’s index includes prices of uncompleted units sold by developers and sub-sales. Such transactions account for about half of all transactions, said the spokesman.

The SRPI has only two sub-indices by region – central and non-central areas.

Already, its flash data for January showed a rise in prices that month.

The data shows that resale prices in the non-central regions have now exceeded the previous high in January 2008 by 4.5 per cent.

However, the prices for the central region are still about 10 per cent below the previous peak.

Associate Professor Lum Sau Kim, who led the NUS project, said one key feature of the SRPI is that it will not be unduly influenced by small numbers of transactions in a quiet market.

The impact of one-off extremely high or low prices will also be dampened, she said.

Knight Frank chairman Tan Tiong Cheng said: ‘Now we have a very clear, transparent and timely index. The lag period is only one month. The main difference is that the URA indices are computed based on the moving average of the value of transactions over the last 12 quarters, so there’s a greater lag effect.’

Besides the timing, Cushman & Wakefield managing director Donald Han pointed out that the SRPI should provide a more accurate picture as its basket does not include new launches. These are typically priced higher than the market and may not reflect the state of the overall market.

Mr Simon Cheong, president of the Real Estate Developers’ Association of Singapore, said at the launch of the index that an index like the SRPI, computed based on the market value of a fixed reference basket of properties over time, ‘can better reflect the actual movement in price’.

‘We are all well aware of how, for example, the current proliferation of ‘micro apartments’ can distort the picture and send a wrong signal to the market when only median prices of all transactions are tracked and reported,’ he said.

This is because these micro units, which can be 500 sq ft or less, are sold at a higher per sq ft price. As prices rise, units shrink to keep the total quantum price at an affordable level.

The index, updated on the 28th of every month, is available at www.ires.nus.edu.sg/srpi.aspx

Source: Sunday Times, 28 Mar 2010

Where do you see this?

In finance articles and websites relating to home loans.

What does it mean?

It is prudent to review your home loan once in a while by checking on the available loan packages at your existing bank and those of other lenders.

You refinance when you switch to a new home loan either with your existing bank or another bank. And when you switch to a new loan with lower interest rates at your existing bank, it is also known as re-pricing or conversion.

Why is it important?

The objective of reviewing your home loan is to see if you can get a better deal by refinancing. There are several considerations, including the penalty that is imposed if you are still in the lock-in period.

You may also incur a fee for terminating your existing loan.

Most banks will want to keep their customers, so ask your existing bank for re-pricing options before checking with other banks.

To help in your decision-making, obtain an updated repayment schedule for your current loan package and compare it with those of the refinancing packages you are considering.

Check the interest payable.

So you want to use the term. Just say…

‘I was advised to read the terms and conditions and understand what the new package offers before refinancing my home loan.’

Source: Sunday Times, 28 Mar 2010