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Reason: Finding a comparable property to replace the one sold will now cost a whole lot more

SCORING a collective sale is usually seen as the real estate equivalent of hitting the jackpot, but try telling that to Mr Sulistiowati Kusumo.

The businessman should be overjoyed - after all, he’s going to pocket $2.3 million for his Horizon Towers flat - but he feels shortchanged.

The Leonie Hill condo was sold en bloc last year for $500 million but that now looks cheap as values since then have sky-rocketed.

But what really gets Mr Sulistiowati, 51, steamed is that he did not agree to the sale in the first place.

‘I’m at the losing end and I did not want to sign from the beginning,’ said Mr Sulistiowati, one of 34 minority owners of the 210-unit 99-year leasehold property.

And finding a flat comparable to his 2,400 sq ft one at Horizon Towers would now cost the earth.

There are many like Mr Sulistiowati, whose tales of woe are starting to drown out enthusiasm about collective sales.

Take Grangeford Apartments, near Horizon Towers. It is up for a collective sale, asking about $2,000 per sq ft (psf) - more than double the $850 psf achieved at Horizon Towers.

This has prompted some Horizon Towers owners to try to get their own deal scrapped.

‘The agreement was signed last year so the price is capped. Now the price increases every month,’ said Mr Sulistiowati.

Businessman Ajay Kumar Dhar, 40, backed the sale but admits to have lost out and has yet to find a new unit in the area.

‘Naturally I regret it, but it’s fate. I may have to go to other districts,’ he said.

The 99-year leasehold Pine Grove has avoided the problem by recently rejecting an offer that would have paid each owner about $1.2 million.

Many owners refused to back the proposal, fearing they would not find replacement units as spacious as those at Pine Grove.

Gillman Heights owners signed its deal last year and finally sold in February for $548 million - about $890,000 for 1,700 sq ft units and $950,000 for 1,900 sq ft ones.

Retiree Cheng Wai Chuen, 68, who has a smaller flat, said he has been priced out of the market.

‘I’ve looked around and I would have to pay about $1.2 million for a place that’s about 1,200 sq ft,’ he said.

Software businessman Mah Kah Hoe, 54, added: ‘Even if I want another 99-year flat in the area, I have to top up another 30 to 40 per cent of what I’m getting.’ He will also receive about $890,000.

Others like Mr Cheng have no spare cash to buy a new place until the sale goes through. ‘I have no money, how do I buy?’ he asked.

The sale paperwork can mean the cash is not paid out until nine months after a buyer has been found.

A Gillman Heights resident who wanted to be known only as Madam Ong, has already bought another flat but it was a forced purchase in view of the rising prices.

Her new Pasir Panjang unit is smaller, further from town, has worse facilities and she even had to fork out about $200,000 on top of the proceeds from the collective sale.

Said Madam Ong, a housewife in her 50s: ‘We think it’s queer that people are congratulating us about the en bloc because we never wanted to sell in the first place and now we have to bear the brunt of it.’

Source : Sunday Times - 6 May 2007

But speculative buyers may be saddled with a poor investment if the sale is unsuccessful

If you like a gamble, you don’t have to wait for the casinos to open. Just roll the dice for a collective sale instead.

The game plan is simple: Pick a condominium block that looks ripe for a collective sale and buy in before the big payday.

Prices of such blocks are showing rapid price rises as hopeful buyers rush in with an eye on the possible windfall.

Their desire to get a slice of the potential action is driving them to meet inflated asking prices from sellers willing to cash out.

But they are taking a huge bet buying in at inflated levels, if they are merely out to make a quick buck rather than buying a home to live in.

The heightened demand could drive values to an artificial high, said Credo Real Estate’s managing director, Mr Karamjit Singh, with the obvious risk that the anticipated collective sale gets derailed.

‘If the sale does not proceed, the prices could fall from the perceived value.’

Investors should be wary of suburban 99-year leasehold properties selling at prices that include a large premium for a possible sale en bloc, said market watchers.

This is because the chances of a successful sale in such estates are slimmer than the chances of one in estates that are freehold.

Savills Singapore’s director of marketing and business development, Mr Ku Swee Yong, said a freehold site can cost around 20 per cent more than a 99-year leasehold one located next door.

Sale prices have surged at the 280-unit Pearl Bank Apartments near Outram Park MRT Station, thanks to attempts at the 99-year leasehold estate to get a collective sale off the ground.

An agent said that last month he sold two 1,755 sq ft units on high floors: one for $1.01 million and one for $1.09 million. The buyers were a local banker and an Indian permanent resident.

But they might not benefit much if such a sale occurs, as the minimum collective sale price of their units is about $1.19 million, although there is talk this could increase if a higher plot ratio for the site is approved.

The sellers were happy to cash out quickly and buy another property before prices went even higher, the agent said. They also do not have to wait out the collective sale, which might not happen.

Caveats lodged showed that three 1,755 sq ft Pearl Bank apartments were sold last month for $857,000 to $905,000 - compared with just slightly over $600,000 for deals done involving units of the same size last June and July.

At Farrer Court, coming up for an en bloc sale by tender, a 1,453 sq ft unit was sold for $900,000 in March. That beats the $870,000 fetched by one unit in February and the $660,000 fetched for another last September.

The price of the land on which a development sits tends to move faster than the price of individual units, said Mr Singh.

‘It would be unwise to buy into a development that is priced close to the collective sale value,’ he noted.

Nevertheless, not all estates are created equal. The well-located properties will attract more demand than those in less favourable areas.

‘If the collective sale of Pearl Bank doesn’t go through, prices will definitely fall, but maybe by just 10 to 20 per cent, because it is a very central development,’ said a property agent.

The story is different for outlying projects, particularly those with poor rental prospects, said a consultant.

A person buying into such developments - and paying a collective sale premium - would find himself with a bad investment if the collective sale failed, she said.

Still, better rental levels could ease the pain.

At the 99-year leasehold Chiltern Park Condominium in Serangoon, whose residents are working towards a collective sale, a three-bedder sells for $421 per sq ft on average.

If a collective sale goes through, the sum fetched could actually fall below that level once the potential charges that developers have to pay are factored in, according to Savills Singapore.

But investors who recently bought units there could at least get relatively good rents, said Savills, noting that asking rents there now average $2,400 for a three-bedder. This level and the average price give a rental yield of about 5.4 per cent - a very good return in the local market.

If a collective sale fails to come through at a condominium, investors must be able to ride out the market and wait for the next round, which could be years away, said a market watcher.

Anyway, that might not turn out to be such a gamble.

‘At the rate things are going, every old development will find its end and give way to new developments,’ said Mr Singh.

Escalating prices

Pearl Bank Apartments

LAST June and July, units of 1,755 sq ft were sold at over $600,000. Last month, three units of that size fetched $857,000 to $905,000; two more, on high floors, went to a local banker and an Indian permanent resident for just over $1 million.

Farrer Court

A 1,453 sq ft unit at this property, which will soon be put up for collective sale, was sold for $900,000 in March. This contrasts with sales done at prices of $870,000 in February and $660,000 last September.

Source : Sunday Times - 6 May 2007

Some flats are selling at $100,000 more than the estate’s valuation

The priciest HDB flats are now in Bukit Merah, with some units selling at $100,000 above valuation.

A four-room flat in Redhill Road was sold for about $470,000 while a five-room one in Jalan Membina fetched $550,000, according to HDB resale figures for February to April.

The prices for these flats have set new national benchmarks for four- and five-room units.

They have even surpassed the 1996 boomtown prices for units in Bishan, which traditionally command the best prices.

Four-room units in Bishan were then going for about $425,400, with buyers paying between $50,000 and $70,000 above the valuation for the then five-year-old flats.

But the appeal of Bishan, which came with good amenities and a park nearby, is waning now that the estate has aged.

‘Buyers now are looking for flats in estates which are convenient and near to town, such as the newer flats in Bukit Merah and Queenstown,’ said Mr Mohamed Ismail, chief executive of property agency PropNex.

‘Orchard Road is within a five-minute drive and downtown within a 10-minute drive.’

Mr Phng Tiong Huat, senior marketing director of ERA, who has just brokered a four-room-unit transaction in Dover Crescent - classified under Queenstown - at a high price of $394,000, said: ‘Although Queenstown and Bukit Merah are mature estates, the newer flats can fetch very high resale prices.

‘They are on the higher floors, and near amenities like markets, MRT stations and good schools. These flats are usually sold out within a week.’

The buyer of the Dover Crescent unit - who wanted to be known only as Mr Koh - said that he did not mind paying a premium as the location is convenient and the unit is new and well maintained.

Another four-room Bukit Merah unit fetched $468,000 in February.

Ms Loh Meilin, who lives next to that unit, is happy about the high resale prices.

‘This is the best place to live in Singapore. It is within walking distance to the MRT, near town and you can get a cab any time,’ said Ms Loh.

High HDB resale prices could finally mean some good news for owners who have seen values stall in recent years while those of high-end condominiums and private homes rocketed with the surging economy.

Private home prices rose 4.6 per cent between January and March and are just 3 per cent shy of the 2000 peak. HDB prices have risen only 1.2 per cent, yet that is the most in 21/2 years.

But it is still all about location.

Flats in estates such as Yishun are not enjoying high prices. Four- and five-room flats there have been selling at prices close to the average market valuation. A four-room flat fetches an average of $220,000 while a five-room unit sells for an average of $300,000.

‘Generally, old HDB estates at the outskirts not within walking distance of the MRT are still transacting at value while those near MRT stations and in good condition are going for about $5,000 to $10,000 above value,’ said PropNex’s Mr Mohamed.

Source : Sunday Times - 6 May 2007

Q I AM a Singaporean, now residing in San Francisco.

My estranged husband and I have been separated for two years and we are due to file divorce papers next month.

Our asset, an HDB flat, has been sold and the proceeds split equally. But my husband refused to pay me any alimony.

We had been married for four years and separated for two years, and have no kids. I supported him through college for two years and when he was jobless.

I also paid for the renovation loan, which he did not pay for. Can I ask for my money back? Is it possible that he does not need to pay any alimony at all according to Singapore law?

A The court has the power to order the division of matrimonial assets at the time of or subsequent to the grant of the decree of divorce.

When doing so, the court takes into account several factors as set out in section 112 of the Women’s Charter.

The list specifically refers to the extent of the contributions made by each party in money, property or work towards acquiring, improving or maintaining matrimonial assets.

Therefore, your payment of the renovation loan would be considered under this factor.

Another factor is any debt owing or obligation incurred or undertaken by either party for their joint benefit.

This would also cover the issue of the renovation loan as well as your having supported your husband through college.

In addition, your financial support could be considered under yet another factor that deals with the giving of assistance or support by one party to the other party (whether or not of a material kind).

Unfortunately, as you have already sold off your only asset - the HDB flat - and there are no other assets, these factors and considerations that would have worked in your favour might not be of much assistance now.

Therefore, you might have to either commence separate civil proceedings to recover your husband’s share of the renovation loan, or weave it into some form of a lump-sum settlement that could also include a portion of this loan.

As far as your maintenance claim is concerned, the Women’s Charter makes provision for a wife’s maintenance both during marriage and upon the grant of the decree of divorce.

Section 114 of the charter sets out several matters that the court takes into account when determining the amount of maintenance, such as income, earning capacity, financial needs, obligations and responsibilities, the standard of living enjoyed before the breakdown of the marriage, the age of the parties, the duration of marriage, any physical or mental disability of either party, and contributions made to the welfare of the family.

Your husband would have to pay you maintenance. The only question is the maintenance amount.

The courts also consider a lump-sum maintenance payment instead of periodic payments where the marriage was a relatively short one, the parties are young and able to earn an income, and where there are resources or means from which a lump sum could be paid.

As your marriage lasted only about four years and there are no children and you both appear financially independent, you have a strong case for lump-sum maintenance, which would allow a clean break.

As mentioned, you could ask for a little more to compensate you for the renovation loan you paid off and for the financial support you gave to your husband.

Had your HDB flat not been sold off, the court could have carved your lump sum out of the net sale proceeds of the flat and you would not have needed to bring an enforcement action against your husband for a lump-sum payment. You would still need to bring an enforcement action against him if he chooses not to pay after the court makes such an order.

If your husband is overseas, you may face some additional problems getting him to pay up as he no longer has any property here in Singapore against which you could secure the maintenance.

At some point, after the proceedings have started, you should also consider the mediation sessions at the Family Court as an expedient, cost-effective and preferred avenue of resolving the maintenance issue.

Gina HoAmolat & Partners

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Source : Sunday Times - 6 May 2007

The Americans head for Woodgrove Estate, the Indians to Meyer Road and the well-heeled to Nassim Hill

American housewife Lisa McMullen used to be scared silly of her countrymen who lived in Woodgrove Estate in Woodlands, the new American expatriate enclave.

Mrs McMullen, who used to live in Shelford Road in Bukit Timah, recalls: ‘I was told how gossipy everyone was, like wanting to know what you were having for dinner. But when we finally moved here, we found that everyone here leads such busy lives they have no time to gossip.’

Since 1997, the American expat community has flocked to Woodgrove from the longstanding American enclaves of Bukit Timah, Tanglin and Holland Road. This is chiefly because the Singapore American School uprooted from Ulu Pandan to Woodlands Street 41 at around that time. Mrs McMullen’s three daughters all attend it.

Freelance interior designer and Woodgrove resident Cheryl Newman recalls of rentals back then: ‘You couldn’t get anything under $16,000′ - so hot was demand for the neighbourhood among American expat parents.

Woodgrove, to the uninitiated, is a neighbourhood on a slope and comprises some 34 three-storey country mansions along lanes with names such as Ashwood, Beechwood and Cedarwood.

It was completed in 2001 by developer Far East Organization. The houses are between 2,800 and 3,000 sq ft each and there is a great concentration of American families there.

Might Woodgrove Estate be just another name for Wisteria Lane, though, home to the Desperate Housewives of TV fame? After all, the spacious houses with bay windows, lofts and more than four bedrooms each actually mirror homes in wealthy American suburbs, a la the fictional Wisteria Lane.

Mrs Newman, a former president of women’s expat club the Singapore Oilwives Association, and her posse hoot long and loud at this.

Aside from the fact that they are all housewives and love cosying up for ladies-only chats, they’d have you know they are ‘anything but desperate’.

Says Mrs Newman: ‘In downtown condos, everyone tends to keep to themselves outside of the club. Here, if you walk your dogs, you will run into at least half a dozen folks you know.’

And no worries if any of Woodgrove’s denizens run out of eggs - just holler to your neighbour for some. Or get them to pick your children up after school.

Halloween, that most American of festivals, is huge here, with even pet dogs being dressed up as ghouls for fun.

It’s a lifestyle leg-up in many other ways: With more space to play with than downtown, they have their own swimming pools and sprawling Balinese-inspired backyards.

But there’s a price to be paid for such lavish living. Some basic amenities they took for granted when they called Bukit Timah or Orchard Road home, such as wet markets and grocers, are sorely lacking in Woodlands.

‘There isn’t even a Starbucks to be had,’ laments Mrs Janet Andrew, who says the nearby Woodgrove mall and Causeway Point have poor pickings, catering more to heartlanders than cosmopolitans.

‘Even the Cold Storage does not stock food expats are used to,’ she says. So the women of Woodgrove drive to the Farrer Road wet market for ‘good fresh chicken’. For slices of Americana, though, it’s still Tanglin Mall.

Mrs McMullen says: ‘When I was living in Shelford Road, my husband Mike used to ring me up after his workday and ask me to join him for a drink downtown. Now I think of the long drive down in the rush-hour jam and just have to say no to such quiet times we used to enjoy.’

Lucky for them then that they and their neighbours are a tight-knit bunch. They’ve even set up an online neighbourhood bulletin board which has come in handy now that burglaries are on the increase in Woodgrove. The families are extra vigilant after a break-in on April 11, and two other attempted burglaries. They also put up with petty thefts - of bicycles, mostly.

The other downside is Singaporean skateboarders who cause a ruckus with their antics well into the wee hours. The police had to be called in to disperse them.

Despite the spectre of intruders, the going rental rate for a Woodgrove country mansion has now gone up to as much as $25,000 a month, they say. This is by far the largest threat looming over this lush suburbia.

The women point out that their husbands’ companies are not likely to tolerate such a spike in rentals. So, if push comes to shove rent-wise, they may just move out.

Says Mrs Andrew: ‘Our husbands and their colleagues are telling us that Shanghai is the next Singapore, and rents there are lower than those here, so you may soon see more American companies relocating their overseas staff to China.’

Still, the estate’s sorority sister vibe should have most American families staying put in the neighbourhood for quite a while to come.

As Mrs Newman puts it: ‘We’ve eaten together at hawker centres here at 3am in our ballgowns and high heels. It’s the stuff that long friendships are built on.’

‘Sometimes people will act like I’m not there, or they think I don’t speak English. But these are only some Singaporeans, so I don’t let that affect me’ Lena Garcia, 30, a maid from the Philippines who has been here on a work permit for the past three years

Source : Sunday Times - 6 May 2007