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February, 2012:

Higher HDB income limits benefit thousands

Feb 28th, 2012
by Singapore Property Resources and Guides, HDB, Districts and Archived listings.
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According to the Housing Development Board (HDB), some 5,100 households have benefited from the income ceiling tweaks that occurred almost a year ago, as the new criteria opened up the opportunity for these households to apply for various build-to-order (BTO) flats.


(Amidst encouraging results from the raising of BTO applicant income ceilings, some analysts say a biennial review of income limits could be useful. Image courtesy of Thinkstock.)

Last March, HDB raised the monthly household income ceiling—the maximum monthly income an applicant’s household should have to qualify for a BTO unit—from $3,000 to $5,000 for three-room flats in non-mature estates. It explained that the move would allow more affordable housing options for low- to middle-income households applying for BTO flats for the first time.

This was followed by raising the 17-year old monthly household income ceiling of $8,000 for four-room or larger flats, as well as three-room units in mature estates, to $10,000.

These actions have been widely suspected to be corrective actions taken by the ruling People’s Action Party to win back its vast share of voters. In his 2011 National Day Rally speech, Prime Minister Lee Hsien Loong explained that the measures were meant to “bring more people into the HDB net”, in a time when rising income levels encouraged residents to look to private housing.

HDB revealed that of the 5,100 applicants, about 3,500 are households with monthly incomes of between $8,000 and $10,000. The other 1,600 applicants are households earning between $3,000 and $5,000 monthly.

The success rates of these 5,100 applicants are still not known as The Straits Times reported that the HDB is still assessing the applicants’ eligibility.

Meanwhile, analysts The Straits Times spoke to remain pleased with these policy changes. Spokesperson for Dennis Wee Realty Lee Sze Teck said the ‘5,100’ figure proves that many still prefer new HDB homes over other housing choices. “In particular, there are many people who want to enjoy the cheaper HDB flats, but because of their higher income, are forced into the resale market, or even private property,” he said.

This seems to be the case for accounts assistant Suah Wei Ling, who had initially applied for a four-room unit in Bukit Panjang in February last year with her boyfriend. The couple changed their minds when the income limits for three-room flats in non-mature estates changed just a month after.

Said Suah to The Straits Times, “We were very lucky to have applied at the right time and qualified for a smaller unit as we did not need such a big flat anyway.”

“This shows that the raising of the income ceiling was a move long overdue as the low ceiling meant people would look to the resale market,” said SLP International head of research Nicholas Mak to The Straits Times.

Resale flats are priced at $380-$550 per sq ft (psf). Larger BTOs cost $250-$350 psf. Executive condominiums have a much heftier price tag of $700-750 psf.

Added Mak, “Given the increasing income levels of many Singaporeans, the ceiling should perhaps be reviewed every two years or so.”

He noted that it was not likely for the revised income ceilings to cause a sharp demand spike for BTO flats, explaining that “many of those who would have opted for public housing would have already applied, while the rest are probably waiting for property prices to come down before going in” over the past year.

In fact as first-timer application rates stabilise, demand for housing seems to be on the decline, even as HDB continuously increases its strength of BTO flats. Some 25,000 BTO homes will be released this year, following last year’s record 28,000.

iProperty.com Asia Property Market Sentiment Report 2012

Feb 21st, 2012
by Singapore Property Resources and Guides, HDB, Districts and Archived listings.
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In December last year, many of you participated in iProperty.com Asia Property Market Sentiment Survey, which resulted in this Report. We thank you for making this Report so great, filled with insights that we’re sure will help you make better property decisions – here and overseas.

As the first regional online property survey of its kind, the iProperty.com Asia Property Market Report comprises of 7,720 responses from website visitors and subscribers of iProperty Group networks in Singapore, Malaysia, Indonesia and Hong Kong. The survey revealed a common thread amongst property buyers throughout the region, but also key country-specific findings.

Did you know?

"85.6% of respondents in Singapore deemed affordability and rising housing prices as the top 2 issues in the property market."

"42.2% of Singaporean users in the survey showed interest in overseas property, citing Malaysia and Australia as their most preferred overseas locations."

"Over half (51.7%) of Singapore buyers has a budget of between SGD 500,000 to SGD 1 million."

" Two-thirds (66.4%) felts that the Singapore property market is holding up well despite the threat of a global recession."

" 58.3% agreed that the government should step in to control COV on HDB flats."



Member of iProperty.com.sg? Login & download the full 65-page Report now.

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Consumer education for ‘DIY’ resale sellers

Feb 14th, 2012
by Singapore Property Resources and Guides, HDB, Districts and Archived listings.
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National Development Minister Khaw Boon Wan revealed recently that one in 10 Housing Board (HDB) resale transactions in 2011 were completed without the aid of real estate agents.


(10% of HDB resale transactions last year were done without a property agent. Image courtesy of Thinkstock.)

In light of this statistic, the minister announced that the Council for Estate Agencies (CEA) would be helping homeowners better understand their rights should they opt to conduct such ‘do-it-yourself’ (DIY) resale deals, as part of the council’s ongoing consumer education efforts.

Khaw noted on his Housing Matters blog that among the feedback he received from members of the public were two opposite suggestions: preventing property agents from handling HDB resale transactions, and prohibiting such agent-free DIY resale transactions.

However the minister found both inappropriate to carry out, explaining that the HDB already provides homeowners who want to conduct DIY resale deals with a checklist of requirements that covers issues such as eligibility and financing.

Although industry analysts commented that there was currently no observable DIY trend, they admitted that it is a common thing for buyers and owners to choose to undergo at least a part of the transaction process without an agent.

The reason is simple: buyers and sellers who do without agents can avoid paying more for the agent’s commission. Real estate agents generally charge about 1% of the transaction price for buyers and 2% for sellers.

Speaking to The Straits Times, SLP International head of research Nicholas Mak explained that although the cost-cutting benefit is attractive, going DIY could be tricky because of all the unfamiliar paperwork involved.

To tackle this obstacle, some DIY sellers like youth worker Kumar Suresh, 39, will only rope in an agent to handle the paperwork. Suresh, who is aiding his sister in selling off her three-room HDB unit at Jurong West, told The Straits Times that he will ultimately complete the resale deal on his own.

“Even with [the agent] doing the paperwork, I can save up to $5,000. By dealing with the buyer myself, I can also decide what is a reasonable price rather than having an agent who might coax me into accepting a figure,” he said.

Business owner Vera Chua, in her 30s, also intends to sell her four-room flat at Tiong Bahru without an agent. She told The Straits Times that she would be engaging a lawyer to deal with the paperwork complexities.

 “I'm doing it to save on the agent's commission and learn how the process works so I can use the skills in future. And because I conceptualised the flat's decor myself, I think I'm the best person to present it and match it to the new owner,” she explained.

Khaw, meanwhile, assured consumers that his “bias will be towards the consumers, but to do so in a fair manner”. In his blog post he acknowledged suggestions from members of the public, such as improving the quality of agent training, and upping agents’ minimum education qualifications.

The minister also let on that the council is working on shortening the time taken to resolve disputes between agents and consumers.

Parties with disputes over the Estate Agency Agreement—which states for the record the agreed commission amount—can look to the CEA’s resolution scheme for mediation and arbitration.

Since last January, all real estate agents have to register with CEA, which investigates complaints and imposes the necessary penalties. The council told The Straits Times that some aspects of its training courses that could be worked on include professional ethics, and business leadership and management.

The void deck – non-profit groups speak up

Feb 13th, 2012
by Singapore Property Resources and Guides, HDB, Districts and Archived listings.
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Amidst protests against the set-up of an elderly day-care centre at a void deck in Woodlands, voluntary welfare groups speak up about why they have made these communal spaces their homes.


(Dover residents find that such social communal facilities have long since been integrated into their lives. Image courtesy of Sengkang.)

For one, these void decks provide great accessibility to the community. Said Alfred Tan, executive director of the Singapore Children’s Society to The Straits Times, “Some of our centres are located in void decks where there are lots of youngsters hanging around, so it makes them more effective drop-in centres.”

Tan explained that the organisation began branching out to Housing Board (HDB) void decks in the 1980s—a deliberate move to get closer to its beneficiaries. Six of the Children’s Society’s 10 branches are currently located at void decks.

He also cited another benefit: cheaper rents. According to Tan, the organisation would have easily incurred four or five times more rent should they have set up shop in a commercial building.

Similarly, Joyce Lye—founder of the Kampung Senang Charity and Education Foundation—said running the elderly day-care centre at a Tampines void deck opened up the opportunity to seek subsidised rent from the Ministry of Community Development, Youth and Sports (MCYS).

She told The Straits Times her void deck space costs merely one-third of the current market rate—an amount that has not changed since the centre commenced some 13 years ago. Lye noted she would have to fork out up to $4,000 a month otherwise.

The Association of Women for Action and Research (AWARE) is another welfare organisation that has bucked the void deck trend, housing its offices, helpline centre, research centre, as well as counselling rooms within a 2,500 sq ft void deck facility in Dover Crescent. Executive director Corinna Lim told The Straits Times that its previous location at Race Course Road was not as accessible.

HDB informed The Straits Times that welfare groups, which offer social and communal services like childcare facilities and senior activity centres, are often set up at void deck spaces with support from relevant ministries.

There are currently some 640 social communal premises at HDB void decks, operated by over 230 voluntary groups and non-profit organisations. The HDB charges them rent of between $1.50 and $4.50 per sq m each month, depending on if they have built their own premises. These rates have stayed the same over the past decade.

MCYS echoed sentiments that many such centres are situated at void decks to serve the immediate community more conveniently. A spokesperson told The Straits Times that it plans the locations for these centres and examines proposals from those requesting to set up at HDB void decks, taking into consideration “the profiles and needs of the residents in the community and the demand for such services”.

Businesses, however, are charged commercial rates for using void deck premises. One such enterprise is Cherie Hearts kindergarten, who has 12 such centres under its belt after moving to the heartlands in 2004.

During a Straits Times visit to estates where social communal centres are commonplace, residents expressed that such facilities have long since been integrated into their neighbourhoods. Dover Crescent, for instance, has about five such facilities within a four-block area.

Yong Fui Hean, a business owner and resident, commented that he sends his children to the childcare centre in Block 3. “I think having these facilities nearby makes it very convenient for those who need to use them. Protesting against having them is selfish.”

Loan sharks force debtors to sell homes

Feb 6th, 2012
by Singapore Property Resources and Guides, HDB, Districts and Archived listings.
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No more scrawling elevator walls with debtor’s names; some illegal moneylenders have employed a new method to get debtors to pay up—making them sell off their Housing Board (HDB) flats and hand over the cash-over-valuation (COV) amount as payment.


(Some illegal moneylenders are making debtors sell their HDB apartments, using the COV received as payment. Image courtesy of Thinkstock.)

These lenders get property agents—some of whom are also debtors—to conduct the sales. For their work these agents get up to 8% commission for these sales. Agents usually receive commissions of 1-5%. COV is the amount that homebuyers foot above the valuation of the flat, as determined by an HDB-approved valuer.

One debtor is engineer David Liew, 37, who spoke to The Straits Times of his embroilment in such a transaction.

In 2008, Liew borrowed some $200,000 from illegal moneylenders (also known as loan sharks) to pay off gambling debts. After years of only being able to pay off interest, and the consequent harassment that he (and occasionally his neighbours) had to put up with, he told his lenders of his decision to sell off his HDB flat, a four-room Bedok unit that cost him $350,000 five years ago.

 “I felt so bad and so humiliated […] As soon as the five-year occupation period was up, I decided to sell the flat,” he said.

The loan sharks, however, brought over a real estate agent to handle the sale. He withheld the keys, but they removed his gate to hold viewings with potential buyers. Eventually, the rogue agent found a buyer who paid $500,000 inclusive of a $50,000 COV—an amount Liew was not satisfied with.

He said, “When they found a buyer, they arranged everything, made me sign despite the fact that I wasn't happy with the price, and then demanded I pay the $50,000 to them once I received it.” Liew added that he did not make a complaint against the errant agent to authorities because he feared for his safety.

Freshly established rules dictate that all agents have to be registered with the Council for Estate Agencies (CEA) to conduct HDB transactions. A CEA spokesperson informed The Straits Times that the council is only able to act when there is a complaint; none, however, have surfaced.

Said the spokesperson, “Under the Estate Agents Act, estate agents and sales staff are not allowed to refer a client to any moneylender, licensed or otherwise, or receive any commission or other benefit from any moneylender relating to any moneylending transaction.” Violation of this rule could result in a fine of up to $75,000, or a suspension or revocation of the agent’s registration.

The Straits Times reported that Liew’s real estate agent was currently aiding in at least four such debt-related HDB sales at an 8% commission per sale. The anonymous agent let on that he knew of five other agents who were engaging in similar transactions for the same illegal moneylender; one of whom said he had “no choice” as he also owed the lender a sum.

Analysts and agencies noted that collusions with moneylenders to obtain loans for buyers were a common thing about two years ago, and these cases are likely to involve only a small group of rogue agents.

PropNex, for one, said its agents are informed of rules and regulations they need to adhere to during training sessions. Chief executive Mohamed Ismail said, “Now that you have to be registered, your rice bowl is at stake when you help these moneylenders. But if they are working together at a moneylender's request, then it is collusion and they should be taken to task.”

Council for Estate Agencies had a good year, says Khaw

Feb 1st, 2012
by Singapore Property Resources and Guides, HDB, Districts and Archived listings.
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The clamp down on errant property agents appears to be working. The Council for Estate Agencies (CEA) reported that three of four complaints it received against agents were successfully resolved.


(About 75% of complaints lodged to the CEA were solved. Image courtesy of Thinkstock.)

According to The Straits Times, the watchdog has handled some 1,431 cases since its inception in October 2010. Of these, 75% were assessed, followed up with, and eventually closed.

Many cases involved the CEA sending letters of advice or warnings, said National Development (MND) Minister Khaw Boon Wan. However, the minister added that a handful have winded up in court or disciplinary hearings.

One particular court case evolved from a complaint against 45-year-old Tan Cher Peng. For posing as an unregistered salesman, Tan was slapped with a $32,000 fine and a one-month jail term in this January.

Most complaints revolve around misleading advertisements, unprofessional services and misconduct.

In a bid to better professional standards in the country, the CEA requires that all property agents register themselves. This nation-wide call was mostly answered: over 30,500 property agents have signed up by January 1 this year.

Now it seems educational levels among agents are on the rise. The Straits Times reported that 81% of new agents have attained tertiary education, up from the 53% figure among those already in the industry.

Agents also currently undergo six hours of Continuing Professional Development (CPD) programme every year, but the figure is set to increase in future. Sebastian Yeo of the Dennis Wee Group told The Straits Times, “I also feel six hours of CPD are not enough, and 12 hours would be better. I hope that the whole industry will be cleaned up in two to three years.”

Another pleased with the announcement is PropNex, whose chief executive Mohamed Ismail told The Straits Times, “I feel that this is a good start for an industry that has been unregulated for a long time. It may take some time as there are over 30,000 people in the business, but I feel that this will bring up the standards for the industry as a whole.”

The council has also implemented a few restrictions, which ban the use of misleading titles (like ‘specialist’ or ‘expert’), the use of figures in publicity material without clearly stated sources, and promising sellers a certain amount of cash premium.

In his Housing Matters blog, Khaw praised the council for having “had a good one year”. He noted that there was more to be done in the areas of rule refining, industry development improvements and consumer education.

The minister added that the government is also reviewing the mechanisms that the CEA uses to resolve conflicts in considering if the Small Claims Tribunal can play a role.