BUILDING more flats for rent could ease the burden on younger Singaporeans starting out in life – just as it could help others invest their resources in developing their businesses.

The idea of increasing the Housing Board’s pool of rental flats to help those Singaporeans concerned about affordable housing, was put to Minister Mentor Lee Kuan Yew at a conference yesterday.

But he was quick to disagree, arguing that it was tantamount to putting the HDB in a position of subsidising rents indefinitely. It would also create a ‘dependency group’ – those constantly dependent on the Government and on subsidies.

The right policy is to, instead, subsidise the price of the flat for the buyer, who then has an asset that will appreciate in value as the economy grows.

‘I’ll improve the surroundings, I’ll improve the lifts, the conditions, I’ll give you more space. But it is yours and you look after it. And we do not have rundown public housing like other countries which are rental (units),’ he said.

The idea was put forward by Professor Deng Yongheng, director of the National University of Singapore’s Institute of Real Estate Studies. He said that having more rental flats would help low-income earners, and also allow others to put their money into meeting ‘entrepreneurship and other demands’.

Mr Lee said that for those needing resources for their businesses, there was ‘nothing to stop you from taking your house, your flat, you go to the bank and say… I’ve got so much more to pay, this is my income, I need this capital to start a business’.

The HDB clarified later to the media, however, that an HDB flat cannot be used as collateral for a bank loan.

In his response at the dialogue, Mr Lee also said that young Singaporeans wanting to invest in business and not be burdened with financing a flat, could rent from the private sector:

‘If you believe you can be a great entrepreneur, then rent a flat from somebody. All the HDB flats are now rentable.’

Mr Lee also disagreed with another idea, raised by Ambassador-at-large Tommy Koh, that the HDB could build retirement communities like those found in Australia and the United States.

Mr Lee said he had read an article by a US doctor, who had assets but who stopped his practice and went into such a home.

‘This retirement home was like a hotel and there were other doctors with whom he could discuss things at an intellectual level… He is in that profession, so he has saved enough to pay for the facilities as if it were a hotel,’ Mr Lee said.

‘You want American standards of living, be an American doctor. Singapore cannot give you that. We haven’t got that kind of economy, nor that kind of land. Not even the developer can afford to go and retire in that kin

EVEN as Singapore’s public housing agency looks back to celebrate its achievements over the past 50 years, it will face increasing challenges that mean evolving to meet changing needs.

The Housing and Development Board (HDB), which marks its 50th birthday on Feb 1, must meet these challenges while maintaining its three-pronged approach of environmental, economic and social sustainability, National Development Minister Mah Bow Tan said yesterday.

He was addressing more than 500 delegates from around the world at the opening ceremony of a three-day international housing conference hosted by the HDB and held at Suntec City.

‘In this globalised world, we face many common challenges: climate change, migration, demographic shifts, shrinking resources, among others,’ he told the conference. ‘These changes impact all cities alike, large or small, developed or developing, sooner or later.’

The conference was a great opportunity for policymakers, architects and urban planners to exchange ideas.

The growing challenges that HDB will face include an ageing population, which may require further innovations in housing policies or building design, he said. Others included integrating the growing number of new Singapore citizens and the effects of rising affluence.

‘As the public housing authority, HDB’s key task is to find innovative ways to accommodate our people, taking these challenges into account,’ he said.

Speakers at the three-day conference, which discussed themes such as environmental sustainability, include housing ministers from Spain, Finland and Australia, and senior government officials from the United States and Hong Kong.

Hong Kong’s Secretary for Transport and Housing Eva Cheng said Hong Kong faced similar challenges as Singapore over land size and a growing population, and had ensured public housing for lower-income earners. She will be speaking at the conference today.

Addressing the audience, HDB chief executive Tay Kim Poh also acknowledged yesterday that HDB has ‘achieved much that we are proud of’, but it is also mindful of the ‘challenges to housing that are shaped by the changing needs and expectations of our people’.

Source : Straits Times – 28 Jan 2010

WHILE the Government will keep the prices of new Housing Board flats in check, it has less control over prices in the resale market.

This state of affairs was highlighted by Prime Minister Lee Hsien Loong last night when he commented for the first time on what has been one of the hottest topics of discussion.

Speaking at a gala dinner to mark the HDB’s 50th anniversary, Mr Lee stressed the Government was committed to keeping HDB flats affordable and that its new flats are priced within the means of the vast majority of Singaporeans.

On top of that, it would also build enough new flats to cater to demand as the population grows. In fact, to cap its 50th year, the HDB will build its one millionth flat this year.

However, the Government does not have control over the prices of resale flats, he said.

His explanation: ‘These resale prices are set by individual households who transact flats on a willing buyer, willing seller basis, and are affected by movements and sentiments in the wider economy, including the private property market.

‘Hence, resale prices of HDB flats will fluctuate from year to year.’

Despite these short-term fluctuations, Mr Lee said these flats would still hold their value in the long run.

‘Over the long term, the value of HDB flats depends on the strength of the Singapore economy. Provided Singapore continues to do well, our flats will maintain their value, and Singaporeans can enjoy an appreciating asset,’ he said.

The affordability of resale HDB flats has been in the spotlight, following a slew of reports showing a surge in prices.

Latest HDB data show resale prices rising 3.9 per cent in the final three months of last year to hit a fresh record, bringing the full-year increase to 8.2 per cent.

Similarly, the median Cash-over-Valuation (COV) paid for HDB flats in that period was $24,000 – double the $12,000 median in the third quarter last year. COV refers to the cash a buyer pays over and above a flat’s valuation.

Price discussions aside, Mr Lee, in his address, looked back at the 50-year history of the HDB, starting from 1960 when it was formed to tackle Singapore’s housing crisis to the present day when it is the provider of quality housing to most Singaporeans.

As he reflected on its successes, he threw up an interesting poser: Given that the entire population is housed, and the HDB has fulfilled its original mission, does it still have a role to play?

His reply: ‘I have no doubt the answer is ‘yes’.’

He explained that the HDB would remain relevant because it performs a crucial dual role: a housing and a social role.

‘It is both a matter of capability – who can build, plan and manage these estates – and also a matter of social policy.

‘Nobody else but the Government can build houses not just to achieve a housing objective, but to achieve a social goal – racial integration, community bonding, establishing and upgrading and maintaining a high quality living environment for the whole community,’ he said.

But the environment the HDB is working in now has changed, as with the expectations of the people, he said.

‘Singaporeans’ aspirations have risen sharply. Finding a roof over our heads is no longer the pressing requirement. The HDB flat is not just a shelter, but also a key investment asset,’ he noted.

So, when people look for a flat now, many more considerations are involved, he said: ‘They want the right flat, in the right locality, at the right time and at the right price. Such high expectations are understandable, since buying a flat is a major commitment for a young couple setting up a home together.’

He stressed the HDB is committed to providing Singaporeans with high quality public housing, although it cannot accommodate every preference and meet every expectation.

The gala dinner also launched the International Housing Conference, which will run till Friday. Some 500 local and foreign delegates, as well as housing experts, are here to discuss such housing issues as urban planning and environmental sustainability.

Source : Straits Times – 27 Jan 2010

Says he was not a key player in en bloc deal sales committee

The newest instalment of the Horizon Towers saga has taken a fresh turn, with one of the parties being sued now applying for the lawsuits against him and another to be struck out.

Tan Kah Gee, a member of the original sales committee being sued by a group of minority owners, yesterday applied to the High Court for the suit to be struck out – saying the action was ’scandalous, frivolous (and) vexatious’.

He also filed his defence against the claims made against him, saying he was not a key player in the sales committee which brokered the en bloc sale of the development.

Mr Tan – and former sales committee chairman Arjun Samtani – are being sued by three sets of minority owners, who are looking to reclaim close to $1 million in legal and administrative costs which they say they incurred during the lengthy fight to keep their homes.

The minorities say they were made to defend their homes against an en bloc process actuated by a lack of good faith on the part of the sales committee, and had to spend much for their effort.

The collective sale of Horizon Towers was an affair which spanned more than two years and involved two Strata Titles Board (STB) hearings and two High Court hearings before finally being decided in the Court of Appeal.

The Court of Appeal ruled against the sale of the development in April last year, saying the sales committee failed to get the best price possible for Horizon Towers. It awarded costs for the second High Court hearing, the second STB hearing and the Court of Appeal hearing to the minority owners who had objected to the sale.

But the minority owners are now suing Mr Tan and Mr Samtani to claim sums which they said they had spent in excess of what the Court of Appeal has awarded them. The three sets of owners are seeking between $117,000 and $370,000 in costs – making for a total of more than $800,000.

But Mr Tan – through his lawyers Senior Counsel Tan Cheng Han and Ian Lim of TSMP Law Corporation – has moved to strike out their claim. He says the entire remedy sought by the minorities was already dealt with by the Court of Appeal last April, when it decided on how it would award costs to the various parties. He said their claim ‘does not form a legitimate item of damage in a separate cause of action’, neither does it ‘flow from a different and additional wrong’ from the Court of Appeal judgment.

Mr Tan also responded to allegations made by the minorities that he was one of the ‘key players in the process leading up to the commencement, facilitation, management and finalisation of the collective sale process’.

In his defence, he claimed he was ‘not a key player’ and cited various correspondence and minutes of sales committee meetings which he said showed that he did not play a major role in the various aspects of the collective sale.

He also responded to the minorities’ claim that he and Mr Samtani ‘pushed for a quick sale of the property for their personal benefit’ because both had bought additional units in Horizon Towers, at the start of the collective sale process, and were keen to profit from that.

Mr Tan’s defence was that he bought a second unit because the location and price were very attractive, and that he had acted in good faith at all times. He said he disclosed his purchase of a second unit to the rest of the sales committee, as well as to one of the minority owners now suing him. He claims he also disclosed the purchase to the sales committee’s legal advisers and was told that he did not have to disclose the purchase of this unit.

The minorities had also claimed, in their suit, that the sales committee had failed to follow up on alternative offers for Horizon Towers, including a higher offer from a Vineyard Holdings. They cited the Court of Appeal judgment, which ruled that the sales committee had failed ‘to proactively follow up on the Vineyard offer and other expressions of interest’.

Mr Tan said Vineyard’s and other expressions of interest ‘never substantively materialised’ and that the sales committee had ‘questioned the credibility of the expression of interest from Vineyard and their level of seriousness given that Vineyard was a Hong Kong company that was not well known and its lawyers were not from a Singaporean firm, but from a small Malaysian law firm’.

He claims he suggested waiting for a higher offer, but that the majority of the sales committee did not agree. He said the sales committee genuinely felt they would not get a better offer than the one by Hotel Properties Ltd (HPL), and that they had been advised by their lawyers to accept the offer.

The minorities will have 14 days to respond to Mr Tan’s defence – and 14 days to respond to Mr Samtani’s defence, which was filed last Wednesday. The court will also convene a date for the hearing of Mr Tan’s striking-out summons.

The minority owners are represented by Kannan Ramesh of Tan Kok Quan Partnership. Mr Samtani is represented by N Sreenivasan from Straits Law Practice.

Source : Business Times – 27 Jan 2010

The world’s largest hotel company Wyndham Group is starting operations in Singapore by managing two new hotels at Balestier Road.

Wyndham will partner a joint venture (JV) between local property developer Hiap Hoe and Superbowl Holdings.

This is also the JV’s foray into the hospitality sector.

The busy Balestier Road area is fast becoming home to more hotels.

The latest two will be managed by the Wyndham Group.

There will be about 10 hotels in the area eventually, but Wyndham said there will still be demand for its mid-scale hotels.

They will cater mainly to medical tourists, due to their proximity to nearby hospitals.

Thomas Monahan, EVP, International Development, Wyndham Group, said: “Singapore is a critical market place in Asia. It is a showcase market place. It is where every hotel company wants to be, and there is certainly a shortage of room inventory in the three- and four-star market place for international brands.

“Our brands are a perfect fit for the market place, and they will help us grow in the Asia Pacific. If you look at the room inventory, most of it exists in the upscale (segment) and so these two properties will be positioned in the midscale, three- and four-star, where there is a lack of inventory in that market place.”

Wyndham is planning to use Singapore as a base to build up its Asian presence.

The two new hotels will operate under the Ramada and Days Inn brands, and will each have about 400 rooms.

They will be separated by a public park, which is being developed as part of a government condition attached to the land development.

Besides the hotels, there will also be an adjacent office block and an integrated hub for dining and entertainment.

This is the first time that Hiap Hoe and Super Bowl are going into the hospitality business.

It is part of the duo’s strategy to seek more steady growth.

Teo Ho Beng, managing director, Hiap Hoe Group, said: “The hotel will give us a very good recurring income, whereas for property development, you will be more dependent on the property cycle.

“Our location is near to the medical facilities that are coming up in this area, and we will be able to cater to some of this outpatient requirement that comes here for consultation.”

The total cost of the development is about S$300 million.

Both hotels are expected to be open in 2014.

Source : Channel NewsAsia – 27 Jan 2010

The Housing & Development Board (HDB) is considering imposing a quota on Permanent Residents buying resale HDB flats. This could be done in the same way that racial quotas are imposed to prevent ethnic enclaves.

The issue came up in a dialogue session on public housing with Minister Mentor Lee Kuan Yew where questions on affordability and aspirations were brought up.

Public housing has come a long way from where it started 50 years ago. Still, issues remain. These include how foreigners are perceived to affect pricing of flats.

Mr Lee said over the next five years, the intake of foreigners will slow down but that means Singaporeans will have to increase their productivity.

Going further, dialogue moderator Professor Tommy Koh asked if more could be done to integrate those already here, in much the same way that the Ethnic Integration Policy was introduced in 1989 in public housing estates to get races mingling.

Mr Lee said: “Could the same approach be adopted towards integrating new Singaporeans? We are not allowing new Singaporeans whether from China, India, Malaysia, or whatever, to congregate in the same tower blocks, which they are already beginning to do.

“They buy second hand flats and they congregate. So we have a record of how many new citizens living where and we keep their numbers dispersed. It’s a very valuable tool of communal harmony.”

HDB later clarified that a quota policy on PRs for resale flats was being considered.

One other issue that came up during the dialogue is that of affordability, which has come up repeatedly. One suggestion was to have HDB provide more rental housing units.

Mr Lee said: ‘I completely disagree with that policy. It will lead us into all kinds of problems. You are getting a dependency group – dependent on the government on constant subsidies, whereas our philosophy is ‘I give you this asset, I will increase the value of the asset as the economy grows but it is yours and you look after it.’ And we do not have run down public housing like other countries which are rental.”

Mr Lee was also asked for his take on a recent media report that at least three opposition parties were eyeing National Development Minister Mah Bow Tan’s ward with the aim of making public housing affordability an election issue.

He explained: “What is affordabilty? From the point of view of the buyer? And the government that is subsidising you? The government has to price it at a level that is fair to the revenue it is collecting and fair to the individual, not only the present buyer but past and future buyers. If Mr Mah is unable to defend himself, he deserves to lose.

“No country in the world has given its citizens and families an asset as valuable as what we have given every family here. And if you say that policy is at fault, you must be daft.”

Mr Lee was speaking before some 500 delegates from 20 countries at a housing conference.

Source : Channel NewsAsia – 27 Jan 2010