(SINGAPORE) The amendment in the bill was a minute one, but it provoked two Members of Parliament enough to raise concerns about the government’s proposal to allow the Housing and Development Board to expand its services overseas.

Ang Mo Kio GRC MP Lee Bee Wah was worried that the statutory board would ‘lose sight of its original mandate’ of looking after Singaporeans and building communities, but National Development Minister Mah Bow Tan was quick to quell her fears.

Earlier, the minister had tabled an amendment to the Housing and Development Act to allow HDB to provide ‘much sought-after technical and consultancy services’ both locally and abroad on matters within its expertise. ‘(This) would allow HDB to act as the government’s agent to service requests to share its expertise in public housing development both within and outside of Singapore. HDB will also be able to develop, sell and acquire intellectual property rights on a commercial basis,’ Mr Mah told the House.

In response, Ms Lee asked if, by doing so, HDB would open a pandora’s box as other government agencies could follow suit and venture overseas in order to make huge profits for themselves. Cynthia Phua (Aljunied GRC) was the other MP who sought clarification from the minister.

Mr Mah said he was in no doubt that HDB’s work locally would not be affected by this move. ‘I’m very clear that is our primary responsibility, the main responsibility, is that HDB must do its work in Singapore. That’s the reason why we have hived off Surbana to allow it to do its work outside,’ he said.

Surbana Corp, formerly the HDB’s building and development division, was corporatised to become HDBCorp and then re-branded as its current name in 2005.

Mr Mah explained that, from time to time, Singapore receives requests from other governments asking it to do some consultancy work in their country. It accepts these requests to share its success stories and generate ‘a reservoir of goodwill’ with others.

He cited the Tianjin Eco-city project, a partnership between Singapore and China to develop the modern township. ‘Within this township, one aspect we are talking about is the provision of a good public housing system, and this is where HDB’s expertise and consultancy services are required,’ said Mr Mah.

‘It’s not so much in the planning of the town itself. It’s about sharing the policies – rental, home ownership, financial – that have worked for us, and those that have not worked so well.’

Mr Mah added that HDB has plans to work with local companies, especially small and medium-sized firms, on specific technical and consultancy services such as the concept of green buildings.

‘This provision enables HDB to do such work. It’s not going to be a big money-spinner for us,’ said Mr Mah.

Source: Business Times, 20 Jul 2010

Proceeds from sale of HDB flats no longer allowed as collateral for loans

(SINGAPORE) Homeowners will no longer be allowed to use their HDB flat or its sale proceeds as collateral for taking loans or paying off debts.

Parliament yesterday fast-tracked the passing of a bill to prevent creditors from laying first claim to the flat, following a spike in the number of people using their flats as security to borrow money from licensed moneylenders.

They enter into agreements to assign the sales proceeds from their HDB flats as repayment of monies owed. The moneylenders then lodge caveats against the borrower’s flat to claim an interest in the sales proceeds. This allows the moneylenders to demand repayment before they agree to withdraw the caveat for the sale transaction to go through.

Two years ago, there were only 12 registered resale applications with caveats lodged by moneylenders. Last year, there were cases. From January to June this year alone, there have been 556 cases.

Revealing these numbers in Parliament, National Development Minister Mah Bow Tan said that the government was ‘concerned’ about this trend because it ‘undermines the intention of the home ownership policy’ that is meant to provide a home for everyone.

It was back in 2008 when the House first approved the Moneylenders Bill to revamp the regulatory regime for moneylenders. The aim was to introduce more flexibility in regulating the industry to keep up with the modern credit economy and resulted in a sharp increase in the number of moneylender licences issued.

What the moneylenders are doing is fully legal as they exploited a loophole under the current framework, which states that flat-owners are not allowed to use their flat as security or collateral for any debt, obligation or claim.

Now that the bill has been amended, this restriction will be expanded to include the sales proceeds from the flat as well. Financial institutions, however, can continue to grant mortgage loans on the security of flats.

The changes also include a new rule that voids any contract or agreement to use flats, including the sales proceeds, as security or collateral. Caveats against flats to repay debt can also no longer be lodged once the bill is in force.

‘The problem is that once a person has sold his flat and repaid the moneylender, he cannot afford to purchase his next flat,’ Mr Mah said. ‘The flat-seller and the other occupiers become homeless and pose a burden to their family and friends for their housing needs. Some also join HDB’s queue for rental flats when they, in fact, do not qualify for rental housing.’

The message that the minister wanted to drive home was that HDB flats are for home ownership and should be regarded as a ‘long-term asset for retirement’.

Meanwhile, Mr Mah said that the Council of Estate Agencies, a new statutory board, would be operational by the end of this year. It will take over the licensing of the 30,000 agents to raise the industry’s professionalism and better safeguard consumer interest.

Source: Business Times, 20 Jul 2010

A legislative amendment to allow the Housing and Development Board to provide technical and consultancy services internationally drew concern from two Members of Parliament yesterday.

They felt the HDB was deviating from its core mission of providing affordable housing for Singaporeans.

If this happens, the top brass would focus on generating income, which would pay them “fat bonuses”, rather than “channelling their minds to seeking local solutions”, said Ms Lee Bee Wah (Ang Mo Kio GRC).

“If HDB is so keen to share its expertise and experience, why not transfer its knowledge to local engineers and architects who are pleading for overseas projects?” Ms Lee asked.

Agreeing with her, Mdm Cynthia Phua (Aljunied GRC), pointed out that Surbana Corporation was hived off from the HDB to provide consultancy. She questioned if the HDB had manpower resources to place staff overseas.

Noting their “grave reservations”, National Development Minister Mah Bow Tan said HDB will not abdicate its primary responsibility of meeting the housing needs of Singaporeans.

The provision arose due to requests for consultancy from overseas governments.

For instance, for the Tianjin eco-city project, the HDB shared policies on home ownership, rental housing and financing with the Chinese government, said Mr Mah.

HDB does have plans to work with small and medium enterprises on technical and environmental services such as green buildings and solar panel installation, which the provision will allow for, he added. “Just to reiterate, it’s not going to make money for HDB; it is rather to generate goodwill on behalf of the Government to create a reservoir of goodwill with other governments.”

Source: Today, 20 Jul 2010

An industrial site at Kaki Bukit Avenue 4 was launched for sale by public tender yesterday.

It’s one of three industrial sites scheduled to be sold under the Confirmed List in the second half of the government’s Industrial Land Sale Programme.

The Urban Redevelopment Authority said the land parcel at Kaki Bukit has a site area of about 3 hectares and has a maximum gross plot ratio of 2.5 with a lease period of 60 years.

It has been set aside for “Business 2″ development where the site can be developed for various functions like light and general industry, warehousing, utility or telecommunication. The tender will close on Sept 14.

Source: Today, 20 Jul 2010

Ratings agency Standard and Poor’s (S&P) believes the credit loss risks of Singapore banks from home loans is limited even if an asset bubble is to form.

In a report, S&P said its view is based on the reasonable level of housing affordability, sound borrower repayment ability and low loan-to-value ratios here.

Also it added that the Government’s measures to cool the market, and mortgage rates turning upward, all played a factor in its assessment.

Mortgages represent the single largest industry exposure for Singapore banks, at about 25 per cent of loan portfolios.

S&P noted that a high savings rate here and low household debt support borrower repayment ability when collateral values fall.

“Singapore households have strong balance sheets, underpinned by a high savings rate, low debt, and low unemployment,” the report said.

The ratings agency added that an unabated increase in property prices is unlikely, given the government’s past willingness to implement cooling measures. Amongst which is the move to lower the ceiling for home loans to 80 per cent of valuation.

“We believe the government will continue to monitor the property market and will implement further cooling measures if necessary,” S&P said.

Still, S&P believes Singapore banks seldom extended loans of more than 80 per cent of valuation even before the loan ceiling was lowered.

Source: Today, 20 Jul 2010

New guidelines on the limited and non-exclusive use of commercial spaces for religious activities were issued on Tuesday.

The guidelines were jointly issued by the Urban Redevelopment Authority (URA) and the Ministry of Community Development, Youth and Sports (MCYS).

Under the guidelines, sites zoned for “Commercial” use in URA’s Master Plan are intended for commercial activities should serve as secular spaces for all.

Religious activities should be conducted at sites zoned “Place of Worship”.

While religious activities are generally not allowed in commercial buildings, URA said it is prepared to exercise some flexibility.

Commercial premises can be used by religious groups if the usage is limited and non-exclusive as long as it does not cause disturbances such as noise, traffic or parking problems.

Examples of spaces in commercial and hotel developments include auditoriums, function halls, convention centres and cinemas.

Also, only existing approved auditoriums, function halls, convention halls and cinemas located within commercial and hotel developments can be considered for non-exclusive and limited religious use.

Further, there will be a size limit.

The maximum space within a commercial development that can be considered for religious use should not exceed a total Gross Floor Area (GFA) of 20,000 square metres or 20 per cent of total GFA of the development, whichever is lower.

Each religious organisation is limited to use up to 10,000 square metres in any commercial space at any one time.

The authorities said this is to ensure that a single religious organisation does not dominate a particular commercial development by taking up a very large amount of space.

In addition, the premises cannot be owned by or exclusively leased to religious organisations.

The use of the commercial space for religious activities should also not exceed two days a week including Saturday and Sunday.

There shall be no display of signage, advertisements or posters of the religious use at the premises or on the exterior of the building.

The building owner and the religious organisation must also take appropriate measures to ensure that the activities do not cause disturbances to the public.

Source: Channel News Asia, 20 Jul 2010

National Development Minister Mah Bow Tan has stressed that HDB flats are not meant to be used as a source of funds for business or other uses.

He said this a day after changes were made to the Housing and Development Act, to prevent owners from using their flats as collaterals to settle debts with moneylenders.

Mr Mah said: “The HDB flat is not meant to be used as a source of funds for business. “The whole scheme was designed to provide affordable, good quality home for them, not to use that as a collateral or sources of funds for other uses whether it is for business, or other things.

“Can you imagine if people are allowed to raise funds from flats, what kind of things they are going to use for? Some will be using it for business. But I can tell there will be many who would not be using that for legitimate business.

“They will be using it for other things. They may even use it to go to the casinos, for example. And then what happens? They lose their money and then they lose their flats. They lose their homes, the roofs over their heads, where will they stay? Where will be their children stay?

“So we decided to be prudent, as far as HDB flats are concerned. If you want to raise funds for businesses, for other things, entrepreneurship, look for other sources for funds.”

The amendments were passed under the “certificate of urgency” in Parliament on July 19.

Any contract using an HDB flat as a security or collateral for any debt other than as mortgage to finance the purchase of the flat will be null and void.

Mr Mah stressed that the gap has to be plugged immediately to prevent moneylenders from lodging future caveats against HDB flats.

“The number of caveats has gone up sharply, and if you don’t move fast, the numbers will keep going up and more and more people will be placed in this position of putting their flats as risk and possibly being homeless.

“So I think that is something obviously not in the interest of the HDB flat owners themselves. So that’s the reason why I decided to move on the certificate of urgency.

“This practice of agents and moneylenders colluding to get people to borrow and use their flats as collateral, I think that practice, will stop because they will no longer be legal.”

He added there have been indeed many cases where flats owners had fallen into serious difficulties after they sold their flats, as a result of the inability to repay loans.

Mr Mah was speaking to reporters on the sidelines of his ministry’s joint scholarship ceremony Tuesday morning.

He presented scholarships to 39 undergraduates and 12 graduate students.

The scholars come from a spectrum of specialisations, including environmental engineering and environmental biology. Some of them will be exploring new fields of study, such as aquaculture, agricultural economics and food technology.

38-year-old Kelvin Ang, who will be taking up a Masters in Sustainable Heritage at the University College London, said: “This scholarship will give me an opportunity to learn from the best practices from Europe in terms of heritage. So if I can have those skills and bring them back to Singapore and apply them here, I think there’s a better future for heritage buildings.”

19-year-old Lee Si Min will be taking up an engineering degree course at the University of Cambridge. She’ll join the Building and Construction Authority when she completes her studies.

Ms Lee said: “I am very interested in how the designs of buildings are made to be safe and sustainable. There are many projects coming up in the MND, for example, the Tianjin Eco-city and I am very interested in them. I hope to play a part and contribute to the society in this manner.”

Source: Channel News Asia, 20 Jul 2010

Holland Tower, a freehold residential apartment block in District 10, is up for sale by tender.

Sole marketing agent Jones Lang LaSalle said the 21,879 square foot site is zoned for residential use and sits in the Holland Park Good Class Bungalow Area.

It has a gross floor area of about 43,691 square feet and has the potential to be redeveloped into a boutique residential development of 52 units of 800 square feet each.

Holland Tower is a 14-storey tower development consisting of 19 units and is in close proximity to the Singapore Botanic Gardens, Holland Village and the Dempsey Cluster.

Ms Stella Hoh, national director and head of Investments at Jones Lang LaSalle, said: “With strong take up rate of residential new launches in the vicinity, this elevated site is expected to draw strong interest due to its locality, proximity to amenities and the potential to be redeveloped into a boutique development offering exclusivity and lush greenery.”

“We believe that the oncoming tenders for private land will receive keen interest from developers,” she added.

The tender for Holland Tower will close at 3pm on August 25.

Source: Channel News Asia, 20 Jul 2010

Two more residential sites have been made available for sale by the Urban Redevelopment Authority (URA).

One of the sites, at Jalan Eunos, is launched for sale under the Confirmed List of the Government Land Sales (GLS) programme.

The other site located at Buangkok Drive and Sengkang Central is being made available for sale under the Reserve List.

A Reserve List site will be released for sale if a developer commits to putting in a minimum bid acceptable to the government.

Together, URA said both sites can potentially yield about 1,020 housing units and will provide developers and home buyers with more choices.

The two sites have a lease period of 99 years.

For the land parcel at Jalan Eunos, the site is about 4.1 hectares in size, with a maximum permissible gross floor area of 57,766 square metres.

The land parcel at Buangkok Drive and Sengkang Central, spanning 1.8 hectares, has a maximum permissible gross floor area of 55,027 square metres.

URA added that 20,175 units made available for the whole of 2010 under the Government Land Sales programme is the highest potential supply in the history of the GLS Programme.

Source: Channel News Asia, 20 Jul 2010