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THE Housing & Development Board (HDB) will continue to provide a range of housing options to cater to buyers of differing income levels and aspirations, Minister for National Development Mah Bow Tan told Parliament yesterday.

He was responding to concerns that the price gain in the HDB market is putting flats out of the reach of many. HDB resale prices rose by about 17 per cent last year. In addition, reports said that buyers forked out up to $727,000 for a five-room flat in a private-developer built, condo-style project offered under the Design, Build and Sell Scheme (DBSS).

The price gain for resale homes should slow this year. Mr Mah said: ‘The HDB resale price index grew by only one per cent in January, and I expect prices to grow at a more moderate pace in 2008.’

The HDB plans to release three more DBSS sites to build up a ‘reasonable stock’ of DBSS flats, Mr Mah said. Together with the four sites already released, the new sites will yield about 4,000 flats.

He said HDB will continue to cater to buyers with different aspirations and means by providing a range of housing options.

However, Mr Mah said that flats built by HDB will continue to be the mainstay of new supply.

‘Similar to executive condominiums, DBSS flats serve a small niche market of buyers that can afford to pay higher prices for public housing with different designs and features,’ he said.

Mr Mah also unveiled details of HDB’s new Lease Buyback Scheme, which aims to help low-income and elderly households.

Under the scheme, which will be implemented next year, the HDB will purchase the tail-end of the flat lease from an elderly household. The occupants will continue to stay in the flat, which will be left with a 30-year lease. On top of the housing equity unlocked, it will provide an additional $10,000 subsidy.

Of the total amount, $5,000 will be given to the household as an upfront lump sum, while the remainder will be used to purchase a CPF Life Plan to provide the owner with a monthly stream of income for life. If the flat is jointly owned by an elderly couple, they will get individual CPF Life Plans.

Source : Business Times - 29 Feb 2008

Some projects can be held off till 2009, he says, as full-year gain swells to $725m

THE property market may have stalled for now, but City Developments (CDL) executive chairman Kwek Leng Beng is not too worried.

He said that if necessary, he can hold off launches of new developments until next year.

‘Rather than launch today when the market is subdued, I would rather start construction on some projects first’ and launch them when demand picks up, Mr Kwek said yesterday.

‘If today there are not many buyers, this means that pent-up demand is building up, which can be very powerful.’

CDL plans to launch more than 400 units in four projects by June, assuming market conditions do not worsen.

It will release the 77 units at Shelford Suites in Bukit Timah, which is said to have been ready for launch for some time.

The group also intends to launch 100 units of the 228-unit Quayside Isle @ Sentosa Cove, and another 100 at a new development on the former Lock Cho Apartments in Thomson Road, which will have 336 units.

The fourth project is a joint venture at Pasir Ris Drive 1. About 150 of its 724 units are targeted for release by June.

Even if the launches end up delayed, CDL may first start construction on Shelford Suites and the Thomson Road project, said Mr Kwek.

This could also bring in more upfront cash for the group when it does sell the homes. Buyers have to pay 30 per cent in cash after foundation work is done, compared with only 20 per cent if no construction has started.

Mr Kwek’s comments yesterday came on the back of a sterling year for CDL last year.

The developer, Singapore’s second-largest, said full-year net profit more than doubled to a record $725 million. Revenue rose 22 per cent to $3.11 billion.

Earnings per share more than doubled to 78.3 cents for the year. Net asset value per share rose to $5.72 as at Dec 31, from $5.21 a year ago.

Last year, CDL booked profits from projects such as St Regis Residences, Tribeca and The Sail @ Marina Bay.

But it has yet to recognise any profits from One Shenton, The Solitaire, Cliveden at Grange and Wilkie Studio - which account for about $1.7 billion of sales. In all, the group sold 1,655 homes last year for a record $3.4 billion.

CDL’s hotel and office properties are also enjoying high occupancy rates in the buoyant market. Its offices are almost 96 per cent occupied, compared with a market average of 92 per cent.

The group has also not adopted the same approach to revaluing its properties as some of its competitors, which have reported huge revaluation gains. With these gains, its profit would have surged to $2.8 billion, it said.

The group is recommending a final cash dividend, tax-exempt, of 20 cents a share in total.

LATENT DEMAND

‘If today there are not many buyers, this means that pent-up demand is building up, which can be very powerful.’

MR KWEK, on why he would rather begin construction on some projects, and launch them later on when demand picked up.

Source : Straits Times - 29 Feb 2008

It’ll be a ’seamless extension’ of CBD, to rival London’s and Hong Kong’s.

THE new Marina Bay growth area will be a ’seamless extension’ of the Central Business District (CBD) and will offer a significant amount of office space, said National Development Minister Mah Bow Tan yesterday.

Adjacent to Raffles Place and Shenton Way, it will be more than twice the size of London’s Canary Wharf and provide as much premium office space as Hong Kong’s Central district.

Mr Mah was responding to a question by Mr Liang Eng Hwa (Holland-Bukit Timah GRC) on plans to rejuvenate the CBD and develop Marina Bay.

Mr Mah said: ‘Marina Bay remains the centrepiece of our efforts. It will be a seamless extension of Raffles Place, and will offer high-quality office spaces along a lively waterfront.’

The district will have a land area of 85ha, more than double the size of London’s bustling financial and shopping hub, Canary Wharf.

It will also offer an estimated 2.82 million sq m of office space, the equivalent of Hong Kong’s main business district.

Mr Mah also revealed that the Urban Redevelopment Authority (URA) will release more sites in this area over the next five to six years.

Once built, these projects will provide more than 1.1 million of office space - the total amount of office space in Raffles Place.

The new Marina Bay financial district is expected to take more than 15 years to materialise, he added.

Mr Mah also said the URA will release land around Tanjong Pagar and ‘redevelop the Ophir-Rochor corridor into a vibrant office cluster’.

Mr Mah also addressed a query from Mr Zainudin Nordin (Bishan-Toa Payoh GRC) on having more underground connections between buildings in the downtown area.

He said Marina Bay will be a pedestrian-friendly area, with covered walkways on the ground and an extensive underground network linking developments to MRT stations.

He added that the Government is working to ease the office space crunch in both the short and long term.

In the short term, the Government has released land for transitional office sites and vacant state properties, which will yield 150,000 sq m of space. These spaces will be available within a year.

The Government has also temporarily disallowed the conversion of office space to other uses in the central area.

Over the long term, about 1.4 million sq m of office space, equal to about five years of supply, will be completed mostly in 2010 and beyond.

Mr Mah said: ‘These measures are going to take some time to filter through to the market. I will suggest that in the meantime, tenants can look at alternative locations outside the central area.’

Source : Straits Times - 29 Feb 2008

Analysts see good demand just like for a nearby plot launched earlier.

TWO more transitional office sites have been launched by the Urban Redevelopment Authority (URA) in a move to help ease some of the pressure on space.

The adjacent sites - parcel A is 8,682.8 sq m in size and parcel B is 9,037.9 sq m - are near the Newton MRT station, between Scotts Road and Anthony Road.

The sites can accommodate developments of up to four storeys that can be built within a year.

Transitional office sites, a relatively new concept, were introduced as a quick fix to the lack of space in the Central Business District (CBD).

They have 15-year leases, significantly less than the usual 99-year leases for commercial buildings.

The response has been mixed. A plot launched by the URA in Aljunied recently flopped, with all bids rejected as being too low.

The URA believes the Newton sites will fare better.

‘Based on market feedback, there is still demand for transitional office sites in the city centre,’ it said.

Property experts also expect a more enthusiastic response.

Mr Nicholas Mak, Knight Frank’s head of research and consultancy, said the prime location near the CBD and Newton MRT would draw bidders.

And the sites being adjacent means a developer could combine the land.

‘There is a potential for amalgamation to create bigger floor space,’ added Mr Mak, who estimated that the sites could sell for around $100 to $130 per sq ft (psf).

This values the parcels from $14 million to $19 million each.

Mr Mak felt the Aljunied site was ‘too close to the red-light district of Geylang’.

For the two latest plots, the industry experts interviewed expect a level of response similar to the Scotts Spazio site, which is across the road and was eagerly received by developers.

KOP Capital is developing the site, which cost $37 million, with partners Hwa Hong Group and Dubai Investment Group.

Insurer Prudential will lease the four-storey building for 14 years, paying $6.50 psf a month. The company should move in by September.

However, some experts believe that transitional office sites will not be commercially viable given their brief tenure. Tenders for the two Newton sites close on April 24 for parcel A and April 30 for parcel B.

Source : Straits Times - 29 Feb 2008

THE Housing Board will not raise the $8,000 income ceiling for first-time buyers of HDB flats, despite numerous calls from MPs and the public for it to do so.

The reason: The income criteria capture some eight in 10 Singaporean families, including upper middle-income earners, said National Development Minister Mah Bow Tan yesterday.

‘I hope Members will agree with me this is more than generous and will not be surprised if I tell them HDB has no plans to revise the income ceiling,’ he added.

His reply during the debate on his ministry’s budget was sparked by calls from MPs such as Mr Christopher de Souza (Holland-Bukit Timah GRC) during the debate earlier in the week on the Finance Minister’s Budget statement.

Mr de Souza said buyers, especially young couples, had no access to affordable housing if they earned more than $8,000.

Mr Mah acknowledged HDB resale prices saw ‘heady’ growth of about 17 per cent last year. But he did not expect the spike to continue.

There are other affordable alternatives for such couples, he said, citing the resale market in executive flats.

Mr Mah also assured Singaporeans that the Government will ensure HDB flats remain within reach of the vast majority, especially young couples seeking to buy their first home. For instance, they will get more chances in balloting exercises for new flats.

On average, the Government spent $1.4 billion a year over the last five years on public housing. In the coming 2008 financial year, it has set aside $1.6 billion.

The vast sums are spent on providing Singaporeans with various housing types to meet changing aspiration and various needs, said Mr Mah as he detailed HDB plans, policies and programmes.

Affordable housing

NEW HDB flats are priced below market value. And the subsidy for first-time buyers can go up to $88,000.

As a result, first-time home owners last year used, on average, only 20 per cent of their monthly income to pay their home loan.

This is well within the 30 per cent benchmark for affordability.

Also, at least 70 per cent do not fork out cash from their pockets each month but settle their mortgage entirely with their CPF contributions.

Many choices

THREE more sites will be offered to private developers to build condo-style flats, under HDB’s Design, Build and Sell scheme.

It will bring the total of such HDB flats to around 4,000 units, to cater to families who can afford to pay more.

But Mr Mah stressed that HDB-built flats will still be the mainstay of new flat supply.

Sufficient supply

ABOUT 700 new flats in Punggol and Sengkang are still available for purchase, said Mr Mah, who allayed concerns over whether supply is enough to meet growing demand.

HDB builds flats only if buyers show firm commitment, in the form of a deposit. It started the practice following a glut of unsold flats in the 1990s.

This build-to-order scheme has not reduced supply. Some 10,500 flats have been launched since last year, and HDB will continue to do more of such projects.

Mr Mah also assured the House that getting a new flat was not a case of tikam-tikam (’trying your luck’), a phrase Mr Baey Yam Keng (Tanjong Pagar GRC) used of couples who came to see him when they could not get flats.

Mr Mah said his checks with HDB showed in the past six years, only 250 were still unsuccessful after taking part in more than four HDB sales exercises. ‘This is less than 1 per cent of first-timer applicants applying for a new HDB flat,’ he said. Also, four out of five of the 250 applied only for homes in established towns.

Such outcomes, Mr Mah said, are why he repeatedly advises young couples to be flexible and go for new flats in newer towns or resale flats.

Source : Straits Times - 29 Feb 2008