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I REFER to last Wednesday’s letter from the HDB, ‘How HDB flats are priced affordably’. It mentioned that a new four-room flat costs close to $300,000 to develop, taking into account land, building and other costs. It did not give details of how each cost is calculated.

I remember a similar Forum letter on July 12, 2004, asking the same questions. It was mentioned that one HDB contractor built flats in Bukit Batok for $50,400 each in 2000.

Even now, factoring in higher construction cost, I estimate building cost is $100,000 to $150,000. That leaves nearly $150,000 to $200,000 for land and other costs. A single block of flats typically has 100 units. That means land (and other costs) on which a single block of flats stands costs $15 to $20 million. Can it cost so much?

For $15 to $20 million, what kind of property can one buy? In District 9 or 10, one can buy property up to 20,000 sq ft.

So is the HDB willing to release details on actual construction costs, say in the Punggol or Sengkang area?

Steven Yeo
 
Source : Straits Times - 22 Jul 2008

I REFER to Mr Terence Puey’s letter last Friday, ‘Only HDB flats required to have bomb shelters?’.

We wish to clarify that, under the Civil Defence Shelter Act 1997, civil defence shelters are required to be provided in new houses or flats.

This applies to all new residential developments, including HDB flats as well as private condominiums and landed houses.

However, developers or owners of residential developments have the option to provide either household shelters or storey shelters in their developments.

Household shelters are incorporated within each dwelling unit, while storey shelters are located at a common property area on each storey.

One design of the storey shelter is the staircase storey shelter, where the staircase in the residential development is hardened to double-up as a shelter.

There are existing residential developments such as private condominiums, which have incorporated such staircase storey shelters in lieu of household shelters in their developments. This may have given the impression that shelters are not required in private condominiums.

The household shelter or storey shelter is meant to protect residents in times of emergency. The shelter is built with walls, floor and ceiling that are strengthened with increased thickness.

The protective steel door installed at the entrance forms an integral part of the shelter structure to protect occupants against weapon effects such as blast and fragments.

Residents are advised not to remove or change the protective steel door as this will affect the overall integrity of the shelter and endanger the shelter occupants during an emergency.

We thank Mr Puey for his feedback and the opportunity to clarify that it is a requirement to provide shelters in residential developments, including private condominiums.

LTC N. Subhas
Director Public Affairs Department
Singapore Civil Defence Force
 
Source : Straits Times - 21 Jul 2008

More factors to considerthan just higher bid price :

I REFER to “Time to relook en bloc rules?” (Weekend Today, July 19-20).

On the contrary to what the letter-writer said, there are already enough en bloc rules. Without being privy to certain information, it is incorrect to infer that the Horizon Towers deal was done in bad faith and the proprietary owners did not get the highest price and were “shortchanged” as a result.

In fact, the Judge ruled that the Strata Title Board found the sales committee had made a judgment call to proceed with the offer, and the objectors did not prove the committee had acted in bad faith.

The pertinent question is whether the committee had made the right judgment call.

It was reported that a higher offer was made from a Hong Kong developer, ­Vineyard Holdings. But who is this developer? Does it have the financial means to complete the deal? The objectors were unable to shed any light.

Whether there was a genuine offer on the table, the objectors were also not able to tell.

The additional $10 million is not exactly compelling when apportioned over 210 condo units. It is also not an amount so huge that Horizon Partners could not counter with a higher offer.

Since Horizon Partners’ offer met the reserve price, it is logical and makes good business sense to secure a sure deal with an established buyer. On that basis, the committee made the right judgment call to seal the deal.

It is noted that the unhappiness and manoeuvre came about when it was learned that a neighbouring development was sold for more than double the price.

Our laws should not be changed just because certain factions failed to get their ways.

Source : Today - 21 Jul 2008

Letter from Ong Cher Meng

I REFER to “Landmark ruling” (July 18).

The judge has ruled that the fact that a higher offer was received for the en bloc sale of Horizon Towers is not within the purview of the Strata Title Board (STB); neither are any allegations of less-than-stellar conduct among the parties.

And that if the STB has to hear such matters, it would never get its job done.

So, if I get an offer for my home of say, $7 million and the en bloc sales committee of my condo gets an offer of $5 million, would my recourse be to sue in the courts while the STB can rule in favour of the $5-million sale and proceed? This defies logic and good business sense.

Moreover, if the STB is not equipped to handle matters pertinent to good faith, the highest sale price, the conduct of sales committee, et cetera, it is time that the approval of en bloc sales be given to a specialised legal tribunal which is equipped to do so.

Further, if the Land Titles (Strata) Act does not provide sufficient coverage to protect the rights of a subsidiaryproprietor who expects a fair and holistic hearing of their grievances, it is time for all en bloc sales to be held inabatement until such matters can be seriously addressed.

Horizon Towers is a mega test case for en bloc sales and it is time to take stock of our laws.

Source : Weekend Today - 19 Jul 2008

I REFER to the letter from Mr See Leong Kit, ‘Market-based pricing has cost buyers dearly’ (July 7).

HDB adopts a market-based pricing approach so as to reflect the true subsidy that buyers enjoy. Under this approach, HDB determines the market value of the flat, based on its location, finish and other attributes. Then, it sells the flat at a discount to the market value.

HDB buyers understand this, and appreciate that new HDB flats are priced lower than resale flats. Similarly, when they want to sell their flat in the open market, they do so at the prevailing market value, not at their cost of purchase of the flat.

We also wish to highlight that this approach has enabled HDB to continue to price its flats affordably despite the current sharp escalation in construction costs. Currently, a new four-room flat can cost close to $300,000 to develop, taking into account land, building and other costs. This is significantly higher than the subsidised price of a four-room flat in Punggol/Sengkang sold by HDB at about $200,000 to $260,000.

Through the market-subsidy approach to pricing, HDB has been able to keep its flats affordable for Singaporeans. On average, first-time flat buyers need to pay only about 20 per cent of their monthly household income to service their housing loan. This is well within the 25 to 30 per cent that is commonly cited internationally as the benchmark for affordable housing. Lower-income households can enjoy additional help in the form of the Additional CPF Housing Grant.

Mr See commented that young couples have to wait as long as six years for new flats. This is incorrect. New Build-To-Order flats take about three years to complete from time of registration. Those with urgent housing needs can consider the resale market where there is a wide range of resale flats to match the preference and budget of buyers. Eligible first-time buyers can also enjoy a CPF Housing Grant of $30,000/$40,000.

Kee Lay Cheng (Ms)
Deputy Director (Marketing & Projects)
for Director (Estate Administration & Property)
Housing & Development Board
 
Source : Straits Times - 16 Jul 2008