Singapore HDB says residents under en bloc scheme generally satisfied

Singapore HDB says residents under en bloc scheme generally satisfied

By Lynda Hong,

SINGAPORE: The Housing and Development Board (HDB) said its latest survey showed that residents under the Selective En bloc Redevelopment Scheme (SERS) were satisfied with their new and improved living environment.

More than 1,000 households were interviewed in the 2007 survey. 96 per cent of the respondents said their present living arrangement was ideal because replacement sites were generally located close to their previous homes.

The survey also revealed that kinship and community ties built up over the years had been retained.

94 per cent of the residents said they felt a sense of belonging to their estates as they had lived there for a long time and were familiar with the area.

72 per cent of the respondents said relations with their neighbours had either improved or remained the same.

Between 2001 and 2006, 4,418 households had moved into replacement flats.
- CNA/so

Source : Channel NewsAsia - 06 Aug 2008

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Tough calls in next property DC revision

Tough calls in next property DC revision
Recent land sales point to cuts, but some disagree
By KALPANA RASHIWALA

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(SINGAPORE) The next revision of property development charge rates is barely a month away. So what can the market expect?
 
 
Recently a few 99-year leasehold condo sites at Woodleigh, West Coast and Choa Chu Kang were sold at prices below land values implied by current development charge (DC) rates, and this could provide evidence for a downward revision in DC rates come Sept 1.

But some property market watchers suggest that the government may leave DC rates largely unchanged for most use groups.

Any drastic cut in DC rates at this point may be seen as the government taking a bearish view on the Singapore property market and lead to a further nosedive in sentiment.

DC rates are payable for enhancing a site’s use or for building a bigger project on it. They are revised twice a year - on March 1 and Sept 1 - and are specified according to use groups and location. The revisions are made by the National Development Ministry in consultation with the Chief Valuer, who takes into account current market values.

In June, a condo plot at Woodleigh Close was sold at a state land tender for $270 psf per plot ratio. This is 43 per cent below the land value implied by the March 1, 2008, DC rate for non-landed residential use for that location. Two sites at West Coast Crescent and Choa Chu Kang Drive were also sold in March and May at $305 psf ppr and $203 psf ppr, 24 per cent below the respective land value implied by current DC rates.

However, Jones Lang LaSalle’s S-E Asia research head Chua Yang Liang argued that these instances are ‘not statistically significant’ compared to the entire market activity over the past six months and that neither a drop nor rise in DC rates is warranted.

Even in Woodleigh, West Coast and Choa Chu Kang where there is land sales evidence to justify a reduction in DC rates, the cuts are likely to be moderate, ‘possibly not more than 10 per cent as the accompanying message of a downward revision in DC rate is likely to cause a further dive in market confidence’, said Colliers International director of research and advisory Tay Huey Ying.

Agreeing, JLL’s Dr Chua said: ‘This round of DC revision is being watched closely by developers and other property players as it may provide a hint of the state’s view/confidence in the property market over the next nine to 12 months.’

DTZ executive director Ong Choon Fah, too, reckons that ‘where there is compelling evidence, they may trim DC rates. But where the evidence is not strong, they may say it’s an aberration and keep DC rates (unchanged) for six months before the next review’.

Another property consultant takes a different view as to why there may be no rush to reduce DC rates: ‘DC rates are a revenue-generating tool. They tend to go up quickly, but usually tend to come down more slowly.’

The government may also be reluctant to trim DC rates just yet as that may be read as a proxy for its assessment of land values, and could in turn create pressure for the state to accept lower land bids at state tenders in coming months. ‘That’s not too good for the coffers,’ an analyst quipped.

Offering a contrarian view, Knight Frank managing director Tan Tiong Cheng predicts DC rates will fall. ‘Selling prices of private homes have either stagnated or are slowly declining while construction costs are going up, so land values have come down, as seen in recent government land tender results.’

Mr Tan also disagreed with the view that any cut in DC rates would be confined to locations with sales evidence of low land prices. ‘After all, the Chief Valuer does not take into account just land sales but the property market in general,’ he reasoned.

He does not think that any drastic cuts in DC rates will send the wrong signal to the market and further depress sentiment. ‘The Chief Valuer has a duty to keep the public informed of reality,’ he said.

Colliers expects average DC rates to stay unchanged come Sept 1 for landed residential, commercial, industrial and hotel use but to be cut 0.5 to 1.5 per cent for non-landed residential use.

DTZ forecasts that average DC rates will generally remain unchanged except for industrial use, which may see an increase of a few per cent. For non-landed residential use, some areas in the prime districts may see a slight decrease in DC rates on the back of softer home prices in these locations.

JLL, too, expects DC rates for all use groups except industrial to remain flat. ‘A rise in industrial DC rates can be attributed to rising demand for cheaper office alternatives.’

Putting things into perspective, CB Richard Ellis executive director Jeremy Lake said: ‘Previously, DC rates were eagerly watched to gauge the impact on land values especially for collective sale sites with a significant DC component.

‘The collective sales market is so quiet now. There have been no private residential sites sold recently that will have exposure to DC. Most developers that have sites with DC exposure would already have locked in DC rates. And if they haven’t, they’ll find that DC rates probably won’t change much.’
Source : Straits Times - 06 Aug 2008

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Mindy Yong

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Singapore Property fee guidelines must go, says watchdog

Singapore Property fee guidelines must go, says watchdog 

Move could foster competition and a price war among real estate agents

By Jessica Cheam 

HOME buyers and sellers will be able to haggle over the commission they pay property agents after a guideline on fees is axed next month.
The Competition Commission of Singapore (CCS) said yesterday that the guidelines adopted by the Institute of Estate Agents (IEA) in 1999 are uncompetitive and must go.

The surprise move could spark a price war among agents, say some experts.

Mr Seah Seng Choon, executive director of the Consumers Association of Singapore, believes buyers and sellers will be the winners: ‘Consumers should not accept agents who are harping on the old fee practices and should be free to bargain.’

At present, sellers of Housing Board flats generally pay the agent 2 per cent of the purchase price while the buyer pays 1 per cent. In private property transactions, only the seller pays 2 per cent.

The IEA guidelines have become standard practice, a point addressed by the competition watchdog yesterday.

It said that while the guidelines are not binding, ‘they provide a focal point for prices to converge. This will… dampen competition and facilitate price coordination.’

It also noted that they are stated as a ‘minimum fee’, which discourages any price competition below that rate.

‘Agents should not be constrained to offer the same price,’ said the CCS, which told the IEA on June 25 that the guidelines ‘are likely to infringe the Competition Act’.

IEA president Jeff Foo said the institute, which represents about 1,600 agents, will axe the guidelines by Sept 25.

Industry leaders had mixed reactions to yesterday’s news. Some say the impact will be minimal as agencies will keep the status quo but other experts forecast an agents’ price war, especially during market downturns.

‘This throws open negotiations between agents and sellers or buyers. Market conditions will determine who has the upper hand,’ said Mr Colin Tan of property firm Chesterton International.

In bad times, agencies could start under-cutting each other, or conversely, agents could demand higher commissions from desperate sellers and buyers, said Mr Tan.

Mr Chandran Pillay, senior vice-president of Global Real Estate Services, said smaller agencies like his cannot lower fees too much as they are already quite low and the costs of selling a property are high.

House-hunter Tania Goh, 24, welcomed the room for negotiation but she was concerned about agents who ‘can abuse this system when they know a buyer strongly desires a property’.

PropNex chief executive Mohamed Ismail said the removal of guidelines ‘may not be a bad thing’ if agents up their service quality to justify the commission they get. His agency will use the IEA fee guidelines as the basis for negotiations with its clients.

Mr Eugene Lim, assistant vice-president at ERA Asia Pacific, said the 2 per cent fee is lower than the 6 per cent norm in the US, for example.

IEA’s Mr Foo said consumers should get written agreements on agents’ fees before accepting any services.

Source : Straits Times - 06 Aug 2008

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Mindy Yong

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