SHOEHORN yourself into a shoebox apartment?

There is wide-eyed curiosity and some narrow-minded incredulity at the ballooning number of people doing that.

Sales of tiny apartments – nicknamed ‘shoebox’ for their size – have increased more than six times, from 300 units in 2008 to 1,900 last year. They represented 6 per cent of new private home sales in 2008, doubling to 12 per cent last year.

National Development Minister Khaw Boon Wan wrote on his blog in June warning that while he did not want to second-guess the market, buyers of tiny apartments should go in with their eyes open. Some market observers warn that the penchant for small living is just a fad, and suggest that small equals unrentable and unliveable.

Naysayers will tell you that living in a tiny apartment is a step backwards in the housing continuum. You do not go from a pondok to an HDB three-room flat to an executive condominium, only to retreat to a 400 sq ft shoebox.

I beg to differ. The way I see it, the popularity of small apartment living is an index of a city’s sophistication. Only cities which can make shoebox dwellers happy can truly say they have arrived.

You see, McMansions sprouting from the soil may spell prosperity, for the house owners and the neighbourhood. But mansions are about people building the bells and whistles (and bathrooms and pools) for themselves. They are buffered by their employees, driveways and groomed hedges from their country, evolved or not. The next-door neighbour could be an unhygienic hyena of a man – but he is producing dirt and noise hundreds of metres away.

Not so for a shoeboxer. Your country or city as a whole needs to be civilised before you can feel like a million bucks in 500 sq ft.

You have to have enough potential shoebox buyers who have evolved beyond the anxious and unsubtle race to accumulate and display ever more square footage and material goodies.

You have to have shoeboxers whose appreciation for design has evolved beyond demanding just sheer, voluminous space – attractive though that will always be – and embrace clever design.

You have to have public spaces that are beautiful, stimulating and yet safe enough for shoeboxers to relax in as shared extensions of their homes.

Little apartments can have the adventurous effect of pushing shoeboxers out the door.

I moved to a 431 sq ft home from a place that was more than twice as big, and while I like cooing in my bird’s nest, I also make emotional claims on parts of the neighbourhood as my home – the many eateries as my kitchen-fridge-dining room, the inviting parks as my garden and the cafes as my sofa-living room.

And sometimes, the lively neighbourhood claims my home as its own, when friends en route to the eateries nearby make a pit stop at my shoebox.

Eight of us once took ourselves on a food tour of the neighbourhood; we began with popiah at a hawker centre, moved on to garlic crayfish at a kopitiam in an industrial estate, then loaded on carbs in the form of beef hor fun with black bean sauce at another kopitiam at the foot of an HDB block.

The evening ended and the night began with all eight (8-1/2 if you count the engorged tummies) fitting themselves into one-third of my place for champagne and wicked laughter into the wee hours.

The ceiling may be relatively high, but I did not need to have my guests arranged in a vertical fashion. Thanks to interesting interior and product design as well as a tweak in my mindset, they were all parked on proper seating: A sofa that doubles as a bed, an ottoman that folds out into a bench (and can fold out into a bed if the bubbly overwhelms), a ghostly see-through chair that takes up little visual space and a black chair that disappears against a background of black cabinets.

When I started living here, I rearranged more than furniture. I rearranged my preconceptions of what I really need in a home and what goes into which room. Must a bedroom be literally a room with a bed? To go further, must a bedroom remain as a bedroom? Why must a room’s function and furniture be dictated by a property developer or architect’s vision? A room can shift its space and shape and be whatever you need it to be for the moment.

I dropped the notion of ‘bedroom’ and even ‘bed’. I regained space the volume of a queen-sized bed, which held my visitors that champagne night, and will become something else some other day.

Pillows and a blanket taken out of a cabinet make a bed wherever I snooze – just like the Japanese bring out futons at night to spread on tatami mats and turn rooms into bedrooms.

Lean on evolved mindsets, designs and public spaces, and you can have champagne dreams and tobiko wishes even in a small apartment.

However, you also need neighbours who have evolved beyond being unhygienic hyenas.

When I visited Japan, I deeply appreciated the country’s standard of courtesy, even in packed conditions. You could be cheek by jowl with your fellow commuters or pedestrians, but you did not feel crowded; the polite words and apologies, the sense of spatial awareness and the valiant attempts to inch away to avoid bumping into you softened the stress.

Don’t get me wrong. This is not a call to turn Singapore into a nation of shoeboxers. I still dream of a home of airy art gallery proportions for myself.

But being able to live well together on less is cause for celebration, not regret. Just as we can feel pleased that we can live together fairly amiably in the shoebox of a nation called Singapore.

Are we fully there yet? No way. But we are on the way. Enough for me to feel at least half a million bucks in less than 500 sq ft.

Doing well living large in a shoebox apartment — ST ILLUSTRATION: MIEL

Source: 27th Sept 2011

THE largest property developer here has unveiled an innovative solar project that will soon power 45 residential blocks in Punggol with the sun’s energy.

The Housing Board yesterday inked a ‘solar-leasing’ agreement with local solar manufacturer Sunseap Enterprises, which will design, install and maintain the $11 million system.

The 2MWp (megawatt peak) solar photovoltaic set-up converts sunlight into electricity, which will then power common-area facilities such as corridor lights and lifts in the 45 blocks. A watt peak is a measure of power output used in relation to photovoltaic solar energy devices.

It will be the biggest solar installation here to date, and the first solar-leasing project.

The Pasir Ris-Punggol Town Council will take out a 20-year lease on the system from Sunseap Leasing, a unit of Sunseap Enterprises.

The town council will thus be spared the cost of the panels and their installation, but instead of buying power from the national grid, it will do so from Sunseap Leasing. The electricity will be priced at the current tariffs, with a 1 per cent discount thrown in.

HDB chief executive Cheong Koon Hean yesterday described the solar-leasing model as a ‘win-win’ one.

If the arrangement takes off, it could pave the way for more solar projects across the island, marking a turning point in Singapore’s growing solar industry.

As this is a test-bed project, HDB will cover 30 per cent of the cost, or $3.28 million; Sunseap will foot the rest.

Sunseap Leasing director Frank Phuan said the company has obtained financing from overseas banks to cover the cost, and will make its money by selling electricity to the town council over the next 20 years.

Up till now, the HDB has bought and installed its own solar panels – for 40 blocks in 10 towns.

With the solar-leasing model, it taps private enterprise to grow the solar programme, said Dr Cheong. She added that the HDB could look into doing the same for another 70 blocks, although their locations have yet to be identified.

‘We are going to learn about solar power generation through this test bed – what works, what doesn’t work… The solar-leasing model enables us to ramp up more quickly the introduction of solar power into HDB towns,’ she said.

Punggol, as Singapore’s first eco-town, is the ideal location for the HDB to start, she added. The agreement comes under the HDB’s $31 million, five-year scheme to test-bed solar energy at 30 of its precincts.

Three companies had bid for the contract, and Sunseap won due to its price and technical abilities, said the HDB.

The 11-year-old Sunseap has 35 staff and a factory in Boon Lay where it manufactures its solar panels. Most of its output is exported to Germany, which has a thriving solar industry.

Dr Thomas Reindl, a director at the Solar Energy Research Institute of Singapore, said solar leasing, though popular in countries such as the United States, is new in Asia.

The benefits of this system are that building owners can buy green power without having to pay upfront costs; and they also do not have to pay more than the prevailing electricity tariffs.

‘However, this concept works out for the leasing company only when electricity prices are not subsidised, such as in Singapore,’ he added. In countries where electricity costs are subsidised, it will not work because the leasing company will incur losses.

HDB’s Dr Cheong said she hoped the test-bed project will contribute to Singapore’s search for solar power generation technologies and develop the regional solar industry.

The installation of the solar panels will be completed by the middle of next year.

Up till now, the HDB has bought and installed its own solar panels. In the new deal, Sunseap will install them, and the town council will buy power from the company.
– ST PHOTO: ALPHONSUS CHERN

Source: Straits Times, 16th Sept 2011

Buyers snapped up 1,348 homes last month, just shy of July’s 1,398. The total number jumps to 1,638 when executive condominiums (ECs) are included.

Experts say the sustained buying activity for a typically quiet month shows that Housing Board (HDB) upgraders are still buying and that confidence in property generally remains solid.

Last month’s numbers were also achieved despite a new policy that raised the income ceiling for new HDB flats and ECs, said real estate consultancy Colliers International’s director of research and advisory Chia Siew Chuin. This change would have creamed off some private market demand.

Suburban homes continued to lead the charge with 1,114 sales last month, comprising 83 per cent of total sales, according to Urban Redevelopment Authority (URA) data out yesterday.

This is the highest number of homes sold in the suburban region this year and the highest proportion of total transactions since URA’s monthly sales data series started in June 2007.

While suburban prices seem to have remained relatively stable and are likely to continue holding firm this year, Ms Chia noted that the band for mass market sales has moderated.

Prices ranged from $600 to $1,679 per sq ft (psf) last month, down from $705 to $1,742 psf in July.

This could be due to developers pricing units more competitively in the light of more choosy buyers, she added.

But most experts believe that developers are unlikely to lower prices in the light of last month’s healthy sales.

Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-east Asia, said demand driven by population growth remains the market’s key driver.

This will continue to support the market beyond the economic uncertainty in the euro zone, he added.

Developers recently called for the Government to review the cooling measures in the coming months given fears that global economic woes could undermine the property market.

But experts say last month’s healthy sales coupled with low interest rates that should stay in place until 2013 have supported demand.

Last month’s launch of an ‘optimistic’ 1,435 units also kept pace with July, when 1,437 units were released.

Experts say developers might have fast-tracked new projects in case the economic climate deteriorates and scares buyers away.

There won’t be ‘double-digit’ growth in Singapore’s residential property prices this year, Capitaland Residential Singapore chief executive officer Officer Wong Heang Fine said yesterday at an event to unveil its Bishan Central condominium design.

‘Some developers are taking the opportunity to launch their projects while the market is still positive,’ Mr Ong Teck Hui, Credo Real Estate’s head of research and consultancy, said.

‘For this reason, we may expect more new projects to be launched during this period and sales take-up could be encouraging, depending on pricing.’

City centre and city fringe homes had less robust activity with the number of both new launches and sales significantly lower.

Experts add that between 15,000 and 16,000 new homes could be sold this year, barring further economic volatility.

They add that more affordable pricing for new project launches by cautious developers might also sustain sales.

This month, more than 500 units have already been sold at Sim Lian’s A Treasure Trove in Punggol at an average price of about $866 psf.

Credo’s Mr Ong said many mass market buyers are owner-occupiers with a long-term view and less influenced by the global market turmoil.

‘Many buyers (now) are probably not too negative about the economic outlook. (They) acknowledge that there will be some slowdown but not a bad recession and in their view, prices, even if they correct, may not be substantial,’ he added.

Source: Straits Times, 16th Sept 2011

ECONOMIC uncertainty is likely behind the poor response to a residential site in Upper Serangoon Road that ended up going for a song.

Allgreen Properties emerged tops in a three-cornered tussle for the 265,012 sq ft site with a bid of $270 million or $291 per sq ft per plot ratio (psf ppr).

That looks like a giveaway given that just three months ago, a 99-year leasehold plot next door at the junction of Buangkok and Sengkang East Drives went for $391 psf ppr.

It is the first time in a long while that Allgreen Properties has topped a tender exercise, said analysts, who added that the developer has been cautious with bids in recent months.

Property experts said the Allgreen bid, if successful, would be the lowest price for a non-landed site since City Developments paid $280 psf ppr for a Chestnut Avenue site in August 2009 that was developed into the Tree House condominium.

Allgreen was followed by a consortium of Frasers Centrepoint, Far East Organization and Sekisui House with an offer of $253 million, or $273 psf ppr for the 99-year leasehold. A unit of Chip Eng Seng bid $261 psf ppr.

Experts cited a number of reasons for the lacklustre bidding.

Mr Ong Teck Hui, head of research and consultancy at Credo Real Estate, said the low offers were a clear sign that residential land sales are softening amid a more uncertain economic climate.

He added: ‘The bids are getting more cautious with more buffer being provided in anticipation of a more difficult market.’

Mr Nicholas Mak, head of research and consultancy at SLP International, noted that the low number of bids could be a sign that developers did not see the site as that attractive.

‘(The developers) could be saving their resources for other site tenders which would be launched soon,’ said Mr Mak.

But he cautioned that the lower land prices might not translate to lower home prices.

‘Allgreen Properties would likely sell the condominium to be developed on this site at the going market price at the time of its launch,’ he added.

The nearest MRT station – Hougang – is some distance away. However, the site’s proximity to Punggol Park and Serangoon Reservoir will appeal to nature lovers and exercise enthusiasts.

The land can be built up to a maximum gross floor area of 927,545 sq ft, possibly yielding 860 apartments.

Units at neighbouring Boathouse Residences have been transacted at an average of $880 psf.

Analysts predicted an approximate break-even price of between $630 and $660 psf.

Source: Straits Times, 8th Sept 2011

THERE were surprisingly brisk sales at property projects over the weekend, to give the month a rousing start after weeks of slow action.

No one in the market had expected sales to hit the levels of a year ago, but the numbers in recent days have lifted sentiment.

The Luxurie in Sengkang has sold 180 units since sales started last week at an average price of $980 per square foot (psf). Most of the project’s 622 units are two-bedders and three-bedders.

Its pricing is similar to that of neighbouring mass-market development H2O Residences by City Developments, but its proximity to Sengkang MRT and bus interchange makes The Luxurie more attractive, said DMG and Partners Research. The Sengkang Public Library and Community Hub are also nearby, as are CHIJ St Joseph’s Convent and Rivervale Primary.

The Meyerise, a freehold development in Meyer Road, has racked up about 80 sales since it started last Friday. Singaporeans and permanent residents comprised about 90 per cent of all buyers. The project has 239 units, a mix of two-bedroom, three-bedroom, four-bedroom and penthouse units. The average price was $1,950 psf, with three-bedroom units the most popular among buyers.

The Meyerise is minutes away from Parkway Parade and Katong Shopping Centre, with Playground@Big Splash and East Coast Park also nearby.

There were 24 units shifted at EuHabitat in Jalan Eunos over the weekend, bringing the total number of sales to 472 out of the 548 apartments available.

Another 20 homes were sold at Boathouse Residences in Upper Serangoon over the same period.

This strong response was also mirrored in the executive condominium market, where applications for the Arc at Tampines were expected to surpass 1,180 by yesterday’s 10pm deadline.

With 574 units up for grabs, this translates to a healthy subscription rate of about 2.1 times.

Anecdotal observations suggest that several showflats, including those at the Arc at Tampines and The Luxurie, were packed with prospective buyers, although that may not translate into big sales numbers.

Associate Professor Sing Tien Foo from the department of real estate at the National University of Singapore’s School of Design and Environment said he was surprised by the crowds. ‘I thought a lot of people are waiting to see how the global market situation will turn out,’ he said.

‘Some people could be going into the showflats to look for inspiration, others could be going out of curiosity, to see what the market situation is like before making a decision.’

ECG Property, which marketed several properties over the weekend, said that while crowds continued to visit showflats, they are not as big as those seen at the beginning of the year.

But ECG chief executive Eric Cheng is optimistic that the next few months will be better: ‘September is not a good month. We’re just getting over the stock market shock and the ghost month has barely ended. The market is still looking very uncertain. Some people may have lost money on the stock market and they might not be looking to put money into property for now.’

But Mr Steven Tan, OrangeTee’s director of residential, is confident that the demand for new homes will continue, despite lingering economic worries.

‘Now the main group of buyers are those who are purchasing for their own stay. Transactions from this group are driven by genuine demand, and they are less affected by all these economic uncertainties,’ he said.

Low interest rates will also go some way towards encouraging new home sales, say analysts.

The number of new home sales, including executive condominiums, hit 1,954 in July.

But the stock market turmoil last month – the Straits Times Index fell 9.5 per cent over the month – has market watchers keenly awaiting August’s figures.

Source: Straits Times, 6th Sept 2011

HOME owners hoping to sell their Housing Board flats seem to have tempered their expectations of reaping eye-popping cash premiums, after the HDB raised the income ceiling for new flats and housing subsidies.

The new rules, which open up more housing options for couples, singles and the elderly, are expected to change the mix of HDB resale flat buyers, say property agents.

With these three groups possibly going for new flats instead of buying homes off the resale market, sellers are lowering their expectations of getting a tidy amount in cash-over-valuation (COV), the sum paid by buyers above the valuation of a flat.

C&H Properties real estate agent Daniel Tan said: ‘Before, it was the standard for many sellers to ask for $50,000 to $80,000 for COV. Now, many of them have lowered this to below $50,000.’

Four-room and five-room flats up for resale in Woodlands, Ang Mo Kio and Bedok have registered dips in their asking COV amounts, he added.

This trend seems to be in response to the raising of the income ceiling from $8,000 to $10,000 for couples looking to buy new HDB build-to-order flats or to apply for the Central Provident Fund housing grant or an HDB loan. The HDB has also raised the income ceiling for executive condominium units from $10,000 to $12,000, and raised the income ceilings for singles and elderly people too.

Industry observers told The Straits Times that although it is still early days, since the new rules kicked in only last week, they expect the number of first-time buyers in the HDB resale market to shrink, as they can now also go for new flats or executive condominium units.

National Development Minister Khaw Boon Wan had previously revealed on his blog that the proportion of first-time home buyers in the HDB resale flat market was about a quarter, or 23 per cent; among singles, it was 15 per cent.

At roughly 30,000 resale flats changing hands each year on average, this means about 7,500 first-time buyers could potentially move to the HDB’s queue for new flats.

ERA Realty key executive officer Eugene Lim estimates that 30 per cent to 40 per cent, or up to 3,000 of these buyers, could switch over each year.

This group is likely to include couples who do not need housing urgently and whose combined monthly income hovers just above the $8,000 level, which previously barred them from buying new HDB flats.

But Dennis Wee Group director Chris Koh thinks the proportion will be lower – perhaps 10 per cent.

He said: ‘The primary reason is that first-time buyers will still be attracted to resale flats because they won’t need to wait three years for their home.’

And because the HDB has also lifted the ceiling for the CPF housing grant, more buyers can now take advantage of this to buy a resale flat, he added.

But both Mr Lim and Mr Koh agreed that more singles above age 35 could enter the resale market now, as more of them qualify for the HDB’s revised $15,000 grant for singles earning up to $5,000.

However, the number will not be significant enough to move overall price trends, they added.

The overall effect of the new rules on the market is that COVs could now cool and moderate the rate of price increases in the resale market.

But Mr Lim cautioned buyers against expecting prices to start falling any time soon, because the supply crunch in the resale market still exists; it will take some time for the HDB’s new flat supply to reach the market before it will cool.

The resale market will still be supported by other buyers, such as permanent residents who prefer buying to renting, and private property owners cashing out of their private homes and downgrading to public housing.

‘With more new flats, some resale buyers will swing over, but we do not expect an exodus… At the rate at which things are moving, the only thing that can bring down overall COV and resale prices is a recession,’ he said.

PropNex chief executive Mohamed Ismail predicts there will still be real demand for housing in the next six months, although the HDB’s record-high launch of 8,000 new flats slated for next month may meet some of it.

‘Overall, resale HDB prices will still increase marginally, but as supply comes on, the overall housing situation should stabilise,’ he said.

Mr Ong Teck Hui, Credo Real Estate’s head of research and consultancy, noted that the change in the profile of buyers in the HDB resale market will have a knock-on effect on the private market.

‘But the main threat is the potential softening of the economy arising from deterioration in external conditions. If it is a significant slowdown, we may expect demand to moderate, leading to an easing of COV and resale prices.’

Source: Straits Times, 22nd Aug 2011

Home buyers, both occupiers and investors, have been scratching their heads more than usual lately on the vexing question of when to enter the market.

Even leaving aside the current global stock market and economic turmoil, it is a perplexing picture.

Will private home prices keep inching upwards, as they have done persistently even after the various market cooling measures brought in by the Government?

Or will the warnings of an oversupply of new homes, coming from certain quarters, prove to be accurate and lead to a sharp slide in prices?

Trying to evaluate the outlook for the local property market has been made even more baffling as a result of policy shifts on public housing, which have been thrown into the mix recently.

Prime Minister Lee Hsien Loong announced during his National Day Rally speech last week that the income ceiling for new build-to-order (BTO) HDB flats will be raised from $8,000 to $10,000, while that for executive condos (ECs) will go up from $10,000 to $12,000.

As a result, an additional 99,161 households will be eligible for BTO flats and an estimated 68,700 additional households for ECs, UOB Kay Hian property analyst Vikrant Pandey has calculated.

The pace of building will also be ramped up sharply, with 25,000 BTO flats to be launched both this year and next – an unprecedented 50,000 new HDB flats in total in just two years.

These changes in the public housing sphere are set to send ripples through the closely linked private market, shrinking the private demand pie especially for suburban mass market homes as middle-income buyers relook their choices.

Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-east Asia, estimates a possible 5 per cent to 15 per cent decline in annual demand for new private housing, translating to 700 to 2,000 units.

This is provided public housing supply keeps pace with the increased demand by this group of new eligible buyers, he said.

The Government has also released a bumper supply of state land – largely in suburban areas – to try to stem rocketing prices in the private market.

This has led to concern about an oversupply in the next few years as the potential inventory builds up.

Coupled with a tighter immigration policy, demand could further slow.

This has sparked growing talk that suburban home demand will soften as prices head for a correction. This might cause home owners chagrin, but home hunters would welcome such a price slide.

More cooling measures unlikely

Some home buyers might be hoping for a fifth round of government measures – after the latest in January – to further cool the market and bring prices down.

However, experts say that this is unlikely for now, with the combination of growing macroeconomic uncertainties and the shadow of an oversupply of homes in the primary market.

Private home prices have also been moderating for seven consecutive quarters, inching up just 2 per cent in the recent April to June quarter.

In addition, land prices have come down at some recent government land sales tenders, indicating that the once bullish sentiment has become more subdued – although competition for good sites is still keen.

An RBS report by analysts Fera Wirawan and Bryan Lim said the measures to cool home prices seem to be concentrated on the HDB market. They also see lower policy risks now – in terms of a fresh round of cooling measures for private homes – in view of current global economic uncertainty.

‘In addition, potential measures to stem speculative demand in the private home market could have limited impact, given the highly punitive policy introduced earlier (in January),’ the report noted.

Where are prices headed?

Experts differ on where they see prices headed, with some predicting firm home prices in the light of low interest rates for the next two years and the strong holding power of developers and households.

Location also comes into play, with choicer sites – especially those close to MRT stations or transport nodes – expected to hold up better in the event of softening demand.

Those who expect prices to fall mostly see it happening in 2013 and 2014, as the construction of many suburban projects reaches completion.

Prices for the rest of this year are likely to hold firm, said Mr Joseph Tan, CB Richard Ellis (CBRE) executive director of residential.

But experts admit that the market outlook has been clouded by the global market volatility, the European sovereign debt crisis and risks of another global recession, with the United States economic recovery stalling.

How these events pan out in the next few months will have an impact on the take-up of new launches and where prices are headed, they predicted.

Goldman Sachs analyst Paul Lian said in a report released this month that he leans towards an oversupply of housing in 2013 to 2014 but is mindful of arguments made to the contrary.

‘At the very least, the quantum shift from undersupply to either balanced or oversupply is sufficient to take the edge off home prices,’ he noted. He expects prices to moderate by 15 per cent over the next 18 to 24 months.

SLP International research head Nicholas Mak sees a more than 50 per cent chance of a correction in the next three years. Whether this will be a short blip or sharp drop, however, depends on how the macroeconomic situation plays out.

RBS’ analysts, however, expect mass market homes to be in short supply till 2014 due to the population jump in the past five years and the lower-than-average home completions in the past decade.

The population rise over the past five years averaged 3.5 per cent a year compared to the 1.9 per cent a year growth from 1996 to 2005, they noted, driven by an increase in the number of non-Singaporeans.

‘Work permit holders who earn less than $1,800 per month accounted for the largest group of non-Singaporean citizens. This had heightened demand for mass residential homes and the segment would continue to be undersupplied until 2014,’ the report added.

When and what to buy?

This has thrown up the question of when buyers should make their move, in the light of the various factors and uncertainties in the market.

While home buyers often try to time the market, experts say that this is very difficult.

Affordability should be the key consideration instead.

Buyers also have to consider their motivations for purchase – budget, urgency of need and availability of what they like, for example – and the type of product they are looking for.

•Resale home or new launch

Mr Tan Kok Keong, OrangeTee’s head of research and consultancy, also said that buyers should be more cautious in purchasing new homes with benchmark prices as the downside risk for such units is greater during a downturn.

•Investment or owner occupation

‘If you can afford only a Japanese car, don’t go and buy a Mercedes,’ Mr Lim advised.

Source: Straits Times, 21st Aug 2011

For the past 18 years, Mr Adam Teo’s home has been a two-room rental flat in Toa Payoh, littered with books, toys and clothes.

Moreover, the 24-year-old is now his family’s sole breadwinner, supporting his mother and two younger siblings.

Years ago, his father became mired in gambling debts, and eventually left home without a trace. Mr Teo had to drop out from his polytechnic diploma course.

He now works as a packing assistant and takes on odd jobs such as distributing fliers, just to feed the family and pay his siblings’ school fees.

Ask someone like Mr Teo if he aspires to have a home he can call his own, and the answer is invariably ‘yes’.

‘Our goal is to buy a flat eventually, but life is getting harder, and things more expensive,’ he said.

The role of the rental flat, meant for the poor and needy who cannot afford their own home and lack family support and other housing options, has come into sharp focus again following the recent National Day Rally.

Recognising that there are Singaporean families who cannot afford to buy flats, Prime Minister Lee Hsien Loong announced in his rally speech that he was raising the rental supply to 57,000 by 2015. The previous target, announced earlier this year, was 50,000 by next year.

The Housing Board’s current stock of rental flats hovers at about 46,000, spread over areas such as Ang Mo Kio, Toa Payoh, Bedok, Tampines, Bukit Merah, Jurong and Woodlands.

The HDB, responding to queries from The Sunday Times, said the 7,000 new flats would be built in areas such as Punggol, Sembawang, Sengkang, Yishun and Bukit Batok, among others.

Rental flats are managed by the HDB. They come in one- and two-room options. Their monthly rents after subsidy range from $26 to $275.

As of last month, there were 1,572 applicants in the rental queue. Waiting time is about 61/2 months.

But the period of peak demand seems to have passed. That was in 2008 when there were about 4,000 applicants, with the waiting time stretched out to as long as 21 months.

More households are renting now, with the number having grown to 45,000, up from 40,556 households reported in 2008.

On average, about 1,800 rental flats are returned to the HDB per year, mainly due to tenants buying their own homes or moving out to live with family members.

Asked for her views on the increased supply, Ms Lee Bee Wah, chairman of the Government Parliamentary Committee for National Development, said it should help ease the waiting time.

During the rally, PM Lee also said the HDB would postpone the demolition of some Selective En Bloc Redevelopment Scheme (Sers) blocks. These would be turned into rental flats to cater to more families who need this leg up.

Families made up 83 per cent of the 2,300 rental applications last year, while singles made up the rest under the Joint Singles Scheme.

Under Sers, selected older blocks, some in prime areas, are redeveloped to optimise land use.

Currently, about 1,400 of the 2,200 Sers flats are offered at rental market rates while 800 are set aside for interim rental housing, which caters to the less needy.

These units are leased to operators like EM Services, LHN Group and the Katong Hostel, who take in Singaporeans, permanent residents, students and those with employment or S-Pass permits.

The HDB said ‘there are several vacated Sers sites that are leased out in the interim, before demolition’, and that it is looking at other Sers sites for use for rental housing in the future.

Earlier this year, some observers – pointing to the clamour for more rental flats for the needy – had urged the use of such flats for this purpose, as a matter of priority.

The HDB has also said that it has stepped up regular enforcement in stopping the illegal subletting of rental flats. There were 300 such cases from 2009 to last year, and 37 such cases so far this year.

The recovered flats have since been reallocated to needy families.

Analysts said that while the Government is tackling the immediate problem, the larger issues, centred on the housing of the poor and needy, are more complex and need further study.

Associate Professor Tan Khee Giap from the Lee Kuan Yew School of Public Policy said the ‘worrisome’ trend of the increased demand for rental housing is the economic outcome of a widening income disparity, caused by rapid globalisation.

Last year, while Singapore’s gross domestic product hit a high of 14.5 per cent, the Gini coefficient – a measure of income inequality on a scale of 0 to 1, with 0 denoting perfect equality – also rose to 0.452, up from 0.448 in 2009.

Prof Tan said that those who need subsidised rental flats now will have difficulty affording even the most basic flats later on.

‘A solid infrastructure needs to be in place to allow single-income households to become double-income earners if possible. And to ensure these families remain small, and their children are properly taken care of and educated,’ he added.

About 44 per cent of rental applicant households last year earned below $800 a month, while the rest earned between $801 and $1,500 a month.

Already, Prof Tan said, the Workforce Development Agency (WDA) is partially correcting these imbalances through the retraining of workers, but ‘it would take time, perhaps an entire generation, to address these issues’.

PropNex chief executive Mohamed Ismail said the larger picture is that the existing stock is just not enough to cater to people who fall through the cracks.

‘Perhaps some are going through a bad patch and have to sell their homes. These people need time before they can get back on their feet. Increasing rental flat unit numbers is a clear signal that the Government is recognising the problem,’ he said.

The Government, he noted, is already helping them, especially the first-timers.

He cited, as an example, new Build-To-Order two-room flats, which were expected to cost about $120,000 before the grants, costing $80,000 or less with the grants.

‘Bear in mind that there will always be people, a small minority, with very different motivations from others, and who are content to rent and have no intention of owning a home,’ he added.

But most rental unit residents The Sunday Times spoke to expressed optimism and hope for a better future.

Dispatch rider Muhammad Irwan, 25, said he was saving up, and that he and his mother, a single parent, will be able to afford a place of their own in six years.

‘One day I hope to stop paying rent, and that my mum and I will each have a room of our own,’ he said.

Technician Jeffrey Chua, 47, said it was important to focus on the happier things to keep spirits up.

‘I’m not educated, and my pay does not rise with the cost of living. Everything I do now is for the sake of my two sons. I’ll be happy if their future is bright.’

Seniors need them most

With new rental flats being added, the issue of who gets priority has to be looked at, noted Ms Lee.

‘We need to prioritise, to give to those who need it. Besides divorcees with children, those old, lonely people who can no longer find work, and cannot afford market rental rates, deserve the most attention,’ she said.

Neighbourhood-based voluntary welfare organisations (VWOs), such as the Lions Befrienders Service Association, have also noticed a rise in the number of seniors living alone in rental flats.

It takes care of 2,600 needy old folks above 65 years of age, all of whom live in such housing.

Said the organisation’s spokesman: ‘With an ageing population, the number of seniors living alone will increase. It’s a constant challenge to find volunteers to provide them with social support and uplift them.’

The Thye Hua Kwan Moral Society’s director of senior activity centres and health, Mr Joseph Cheong, said: ‘This generation of people, in their 70s and 80s, are living longer with better medical care. With no social support, they have nowhere else to go, so the least we can do is to make their lives easier.’

The VWO is responsible for about 2,030 rental flats.

In Singapore, the average life expectancy at birth last year was 81.7 years, up from 75.3 years in 1990.

Ms Lucy Tan, 65, the centre manager of Peace Connect, which takes care of 2,296 rental flats, believes more can be done in housing estates to prepare for the silver tsunami.

She said some one-room units may be unsuitable for seniors as they are cut off from the residential community or have little ventilation. ‘If ageing-in-place is to be encouraged, then more deliberate social planning is needed. But to be fair, HDB, by and large, has done a fine job in upkeeping the flats,’ she said.

These smaller units could also cause strained relations, said Ms Peh Kim Choo, assistant director of Hua Mei Care Management Service, which is under the Tsao Foundation.

Currently, one of the ways seniors can qualify for rental housing is to register under a joint application.

‘Sometimes this does not work, as it puts two total strangers with different lifestyles together in a very small living space. And that often creates a hotbed that breeds conflicts,’ she added.

Source: Straits Times, 21st Aug 2011

Responding to Internet users on his Facebook page on National Day, Mr Khaw explained that these premiums, also known as cash over valuation (COV), are determined by buyers and sellers and cannot be removed.

Mr Khaw had posted a National Day celebration update and engaged with netizens on a few issues ranging from housing prices to recessions for over an hour.

One user, Lee Soh Geok, asked Mr Khaw why he is against removing COV, which has spiked in recent months due to high demand for HDB resale flats amid a supply crunch.

COV is the amount a buyer pays over and above the valuation of an HDB resale flat. As it must be paid in cash, it has a significant impact on affordability.

Mr Khaw replied: ‘It is simple… COV is the difference between (a) price of flat as agreed between buyer and seller and (b) the valuation of the flat given by a professional valuer. (b) is done by an objective professional. (a) is between buyer and seller.

‘Abolishing COV means removing (a)? Then who sets the price? The professional valuer? Years ago, it was tried. COV then went underground as ‘under counter cash payment’,’ he wrote.

Mr Khaw was referring to ‘cash-back’ schemes which were exposed back in 2001, which involved buyers and sellers over-declaring the agreed selling price.

It allowed the buyer to get a higher loan either from a bank or the HDB, with the ‘extra’ cash illegally divided out among those involved.

In recent years, other ways of getting around the rules have surfaced, including a ‘magic dollars’ scam where buyers and sellers falsely declared a low sale price – with the buyer giving the seller some cash in return.

Such offences are punishable by a jail term and/or a fine.

ERA Realty key executive officer Eugene Lim told The Straits Times yesterday that it is ‘understandable’ why the minister cannot ban COV.

‘If you ban it, money will start going under the table… but it is true buyers and sellers are negotiating on COVs rather than the total price. We should do something to correct this mindset,’ he said.

One solution is to educate buyers to think about the total sale price rather than just the COV component, he added.

The HDB could also release more up-to-date information on resale deals so buyers have a clearer picture of market prices, he added. Currently, the HDB’s website releases such data but only two to three months after the transactions.

Eventually, when the HDB’s aggressive supply of new flats reaches the resale market, demand will ease and COV will drop, said Mr Lim.

Mr Khaw also tackled other comments made by Internet users such as Harry Yohannan, who called for continued downward pressure on home prices.

The minister said in response: ‘We have to do it gently or too many people will get hurt.’

Source: Straits Times, 11th Aug 2011

Mr Khaw Boon Wan meeting Mr Ridae Dahlan, 67, yesterday. The National Development Minister was going door-to-door to distribute rice and rice cookers to residents of Blocks 512 and 513, Wellington Circle, as part of a Sembawang Zone B Residents’ Committee project. — ST PHOTO: CAROLINE CHIA

‘Hold off on upgrading flat’

He said his current priority is to help newlyweds secure flats, and he urged those looking for an upgrade to ‘please hold on for a while’.

LIKE comparing apples and oranges.

National Development Minister Khaw Boon Wan used this analogy yesterday to explain why the Housing Board has stopped releasing the figure for the overall median cash premium paid by buyers over and above the valuation of flats across all estates.

He also said that while the Government is concerned about rising resale flat prices, the problem will be largely resolved in three to five years, when build-to-order (BTO) flats are ready.

Referring to the overall cash-over-valuation (COV) figure, Mr Khaw said looking at it in this way was irrelevant and could be misleading because there are many other variables involved.

For example, in one month, there could be more flats sold in an area like Ang Mo Kio, where property prices tend to be higher. In the next month, more may be sold in Woodlands, where prices are typically lower.

‘To me it is very apple to oranges,’ said Mr Khaw. ‘If housing type changes month to month and location changes month to month, the figures will move up or down, and you think prices are going up or down. I think that is a wrong conclusion.’

‘I don’t think we should reflect those data because it is misleading,’ he told reporters at a community event in Sembawang.

Mr Khaw added that the relevant information on transaction price and median COV of flat types in various estates that flat buyers need is still available.

His comments came two days after the HDB said it will no longer disclose the overall median COV figure nationwide in its usual quarterly releases.

It has also stopped providing overall median COV figures for different housing estates and flat types.

On the same day, it released fresh figures showing resale flat prices rising 3.1 per cent to a fresh record in the second quarter.

Asked yesterday about rising resale flat prices, Mr Khaw said they are due to an imbalance in supply and demand. He urged Singaporeans to be patient as tackling these two issues will take time.

To increase supply, he has already launched two housing projects, and two more will be released this year, together with a launch of surplus flats.

HDB is on track to deliver 25,000 new flats this year.

As for demand, he said the property cooling measures implemented earlier this year have also removed unnecessary demand from speculators.

He also urged upgraders to hold on instead of entering the market now as prices are currently ‘too high’.

Mr Khaw believes that couples will feel less anxious and more reassured once they get to select a flat, even though it may take three years for the flat to be ready.

‘BTO will have an effect, new housing plans will have an effect on the resale market. The more I push out, I am sure there is some influence,’ he said. ‘Prices will stabilise, I am quite confident.’

Source: Straits Times, 25th July 2011