When Mr Peter Breitkreutz decided to buy a Housing Board resale flat in July last year, living close to other Australians was hardly uppermost in his mind.

A permanent resident since 2008, all the Brisbane native wanted was a five-room unit on a mid to high floor, lift access on each floor and a flat that was not too old.

‘We were very open to many areas, except the west because we weren’t too familiar with places like Jurong,’ said the 43-year-old who works in the financial industry.

He and his wife, who is from China, viewed properties in Woodlands, Ang Mo Kio and Pasir Ris before settling for one in Sengkang.

The flat was close to a pre-school in Yio Chu Kang that they could enrol their two-year-old son in.

It was also a five-minute drive to his office in Ang Mo Kio, until he took up a new job in the city recently.

The flat’s valuation was $400,000 but, after negotiations with the seller, the couple knocked back the price to $375,000.

The factors influencing their purchasing decision are not unique, said property agents.

They, as well as other PRs from countries like India, China and Indonesia, confirm that similar considerations are at play behind their resale-flat transactions.

The issue of PRs and resale flats was in the spotlight last week. Minister Mentor Lee Kuan Yew said at a dialogue that the Government did not want to see new citizens congregate and would disperse them across HDB estates.

The HDB also disclosed that it was considering introducing a separate ethnic quota for PRs to prevent enclaves from forming in housing estates.

The latest statistics show there are 533,200 PRs. They own around 5 per cent of the nearly 900,000 HDB flats islandwide.

According to property agents, PRs pick a resale flat primarily based on what they can afford.

They also hope for the flat to be close to their workplace, transport options like an MRT station or bus interchange, and facilities such as schools and supermarkets.

Being near others of the same nationality is not a major pull factor, said agents, though certain locations may see a higher concentration of PRs from a specific country, compared with other districts.

PRs from Myanmar, for example, like Jurong West because they work in shipyards, offices and factories in the area.

PropNex agent Abdul Hamid has seen many Indian PRs going for flats near Lorong Ah Soo ‘as there’s an international school for Indians there’.

Proximity to places of worship sometimes matters, with some Indian PRs plumping for units in Race Course Road or Farrer Park, to access temples in Little India.

Filipinos choose areas such as Jurong West, Simei and Bukit Panjang for the relatively cheaper prices.

But PRs from Malaysia and China are scattered islandwide.

ERA agent Joyce Lim said her PR clients ‘don’t really say they want to stay near friends’. It is mainly pricing that influences where they buy, she added.

Deals involving PRs – usually young couples or those with kids – make up 20 to 30 per cent of property agents’ monthly transactions.

They note that PRs with higher incomes pick newer estates like Punggol or Sengkang and those closer to town like Queenstown.

In such areas, they may pay up to $350,000 for a three-room flat and $500,000 for a four-room one.

The less well-off opt for more mature neighbourhoods such as Bukit Batok where a three-room flat may cost $300,000, and a four-room type up to $430,000.

But while certain areas may be preferred, agents said they do not know any specific block that has a high concentration of PRs in general, or those from a specific country.

The fact is that PRs and Singaporeans are subject to the same quotas under the Ethnic Integration Policy, introduced in 1989.

Proportions for the main ethnic groups – Chinese, Malays, and Indians/Others – in each block, and each precinct of around 10 to 12 blocks, are subject to quotas.

Sale of a flat to a buyer from an ethnic group that has reached the block or precinct limit is not allowed.

The aim is to maintain a healthy racial mix in estates.

Dennis Wee Group agent Ivy Eyu said a Chinese customer of hers was unable to buy a five-room flat in Queenstown because the quota had been reached.

PRs from Japan, Myanmar, Europe and Africa fall under the Indians/Others category.

And given the influx of immigrants in recent years, agents like ERA’s Ms Angeline Lim said they have run into a roadblock when representing Indians.

They have been unable to close deals if the quota for a block or precinct has been reached.

Which is why ERA’s senior division director Syed Abdullah Alhamid said: ‘Looking into the policy now is a plus point, but I think it’s also time to up the quota for the Indians/Others group.’

His firm’s marketing director Tan Yam Seng agreed, saying: ‘If the Government wants to do anything about it, they should adjust it to reflect the current ratio of the market population.’

Source : Sunday Times – 31 Jan 2010

In this era of homeland security, a building should not be a house built on sand.

When a truck bomb went off outside a building in Oklahoma in the United States in 1995, most of the 168 victims died – not from the direct blast effects, but from the partial collapse of the building.

There would have been more survivors if it had been designed against progressive collapse, that is, the failure of one part leading to the crumbling of a much larger part, or even the entire building.

In hindsight, too, the 18-year-old building could have been retrofitted with added structures to strengthen it.

Meanwhile, one outcome of the Sept 11, 2001 terrorist attacks in the US is a worldwide drive to strengthen the security design of buildings.

In Singapore, the Ministry of Home Affairs (MHA) on Jan 20 produced a 138-page document to help those who design, construct and manage buildings to protect their properties against terrorist strikes.

The draft version of the Guidelines for Enhancing Building Security was first released in November 2007.

Home Affairs Minister Wong Kan Seng, in his foreword, called on the building and construction community to use the document to improve building security.

He described it as a ‘comprehensive compilation of international best practices in building security that can be applied to Singapore’.

The document cited several cases to bring home the reality of the regional threat.

Last July, seven people were killed and scores injured when suicide bombers breached the JW Marriott and Ritz-Carlton hotels in Jakarta and set off explosives.

The document noted that the terrorists’ targets ‘are now commonly hotels or resorts’.

It recommended different tiers of protection, based on factors like the number of people who use the building, its purpose, nature of activity and if it is symbolic or iconic.

The proposed modes of protection include access control and alarm systems, vehicle anti-ramming barriers and even how vegetation can help or hinder security.

‘Trees with a trunk diameter of larger than 50cm can be used to stop a vehicle, depending on the protection level required,’ said the document.

But thick vegetation can also be exploited to hide bombs and weapons, it said.

Building owners may claim that such measures are costly, but the ministry said costs will not increase much if security concerns are addressed from the beginning – during the design stage.

This is the practice of City Developments, which said security issues are addressed from the design phase of each new development, encompassing architectural design, building security infrastructure and the needs of the various stakeholders.

Its spokesman added that building security was of the utmost importance.

‘In our existing commercial buildings, we continually review security technology and innovation with the aim of enhancing security within our buildings,’ she said.

For example, independent assessors conduct regular security reviews at Republic Plaza. The company is studying the MHA’s guidelines ‘with the view of further enhancing security within our premises’.

At Marina Properties, which manages Millenia Tower and Centennial Tower, an annual budget is dedicated to upgrading security equipment and staff training.

Its measures include secure card access, regulated driveways to prevent unauthorised parking and the recording of vehicles moving in and out of the compound.

There are cameras at strategic locations, including the lifts, while security officers conduct regular patrols, sometimes in plainclothes.

‘Flowerbed bollards’ function as anti-crash barriers, proving that strong buildings need not look like fortresses.

A spokesman for United Engineers said: ‘The beauty of a good design lies in functionality and aesthetics co-existing. With advanced design technology and good creativity, this is increasingly possible.’

Source : Sunday Times – 31 Jan 2010

Ever since the release of the latest housing statistics last week, public housing prices have become the talk of town.

And no wonder: Figures by the Housing and Development Board (HDB) showed resale flat prices rising 3.9 per cent in the final quarter of last year, hitting yet another fresh record.

They have risen about 40 per cent from 2007 to last year, and are now some 10 per cent higher than the previous peak achieved in the fourth quarter of 1996.

For the whole of last year, resale flat prices rose 8.2 per cent.

But while disgruntled home hunters lament that resale flats are now priced out of their reach, property analysts say there are still gems to be discovered in some housing estates.

An analysis of the latest statistics by The Sunday Times shows some estates still offer flats for less than $400,000.

Four-roomers in Yishun – an established estate – turned out to be the cheapest, going by the statistics. The median resale price for the fourth quarter was $292,000 – the lowest among all estates (see table). In comparison, four-room flats in the most expensive estate, Queenstown, had a median resale price of $523,000.

Bukit Panjang, Woodlands, Jurong West and Choa Chu Kang were some other estates that offered affordable four-roomers in the low $300,000 level.

For buyers looking for five-room units, the median resale price for such homes in Woodlands at $365,000 was the most affordable, followed by flats in towns such as Bukit Panjang and Sembawang.

Executive flats in Sembawang, Yishun and Woodlands were sold at the lower range of the $400,000 level.

Chesterton Suntec International research and consultancy director Colin Tan said that ‘from time to time, you see good value in some locations’.

For example, some estates have been slated for rejuvenation and upgrading such as Tampines, Yishun and Jurong. But because the plans are long term and have not materialised yet, flats in such estates remain affordable.

Buyers who are patient and buy units in such estates could see capital appreciation of their property when the rejuvenation is completed, say analysts.

But to some extent, the current prices of the more affordable flats already reflect the value that the market attaches to them, added Chesterton’s Mr Tan.

The fact that these estates are not in prime locations is reflected in the prices. Those who cannot afford flats in central locations can find good alternatives in the suburban towns, he said.

One upside about living in suburban areas is that you can typically get more space for your money, he added.

PropNex chief executive Mohamed Ismail noted that other estates which remained relatively affordable included Bedok, Hougang and Jurong East.

Suburban towns may also see an appreciation in flat prices if HDB does implement a quota on the number of flats permanent residents (PRs) can buy, he said.

The HDB said recently it is considering introducing a separate ethnic quota for PRs to prevent them from forming enclaves in public housing estates – but details are not available yet.

‘If there is indeed such a quota imposed and PRs are restricted from buying too many flats in a specific area, for example, central locations near an MRT station which they tend to favour, then demand for resale flats will spread more evenly throughout the island,’ said Mr Ismail.

Chesterton’s Mr Tan pointed out, however, that housing statistics serve only as guidelines. ‘In truth, market information is imperfect and bargains can be found just about anywhere – central as well as suburban. You have to be patient to look for it,’ he said.

ERA Asia-Pacific associate director Eugene Lim said: ‘My advice to home buyers is, buy what you can afford. Prices are at an all-time high now, home buyers will do well to be very prudent with what they spend on.’

Source : Sunday Times – 31 Jan 2010

The wait lasted nearly half a year. Since I exercised the option to buy my first new home some time last August, I had eagerly awaited the day I could move in, pop open a bottle of champagne and bask in the smell of my freshly painted walls. That day finally arrived just in time for New Year’s Day – the beginning of a whole new decade – and I was understandably excited. But just before and after The Big Move, I was besieged by a phenomenon I had never thought about: post-purchase cognitive dissonance (PPCD). I’m not making it up, really. Cognitive dissonance is defined as a condition of conflict or anxiety resulting from one’s actions. And PPCD is when, after buying something, you feel that an alternative would have been preferable. In fact, you go through a rationalisation process in your head, questioning all the factors that made you decide to buy the said thing, and wonder if it was all one big mistake. You see, in my quest for a spacious, affordable home somewhere in the suburbs, I had bought a 99-year leasehold apartment. I surprised myself because I have traditionally been on the side of freehold property in the freehold versus leasehold debate. I know the typical arguments for both sides of the case but I never gave it much thought till I became a home buyer and the cold, hard, facts were staring me in the face. I had started off looking at freehold properties but, when it came down to dollars and cents, I realised that the difference between a freehold and leasehold apartment of the size I wanted was more than $150,000 and it made a big difference. I took the plunge. Today, my 1,650 sq ft property has 85 years left on its lease. After spending every penny my other half and I had on renovations and furnishings, we were thrilled the day we moved in. Everything was gleaming and it felt good that we owned everything we saw. But this lasted only a few days. Acutely aware of the new depths my bank accounts had plunged to, I was overcome by an attack of PPCD during lunch with my mother one day while shopping for cutlery. Mum, I asked, did I make a bad move sinking all my money into a property that will take me 30 years to pay off? And at the end of 99 years, would be worth absolutely nothing? Also, given the price I’d paid for the property, is it likely that I could even break even on costs if I wanted to sell my apartment a few years later? I was panicking, and convinced that nobody would buy my apartment when I want to sell it. I would incur a huge loss on it – something I wouldn’t be able to live down as a property reporter. In an attempt to alleviate the symptoms of my PPCD, I spoke to some property analysts for an objective assessment of my choice to invest in a leasehold home. This is the list of factors to consider that I eventually came up with: 1. Affordability The major advantage of a leasehold property is that it is cheaper and offers a first-time home buyer a good opportunity to get on the property ladder without financial stress. 2. Yield Leasehold homes also typically give you a higher yield compared to a similar freehold property as you can command the same rent but your capital outlay is lower. 3. Depreciation, and factors that will compensate for this The main drawback is that the value of your property depreciates with age. I have now come to accept this fact, but there are some factors that can influence the rate of depreciation, such as location, quality of amenities and transport network. For those contemplating a leasehold home, is it near an MRT station? Is your estate slated for major upgrading? Thankfully, I thought, my new home will benefit from the upcoming Bukit Timah MRT line. 4. Collective sales Leasehold properties typically receive less proceeds as developers have to pay the Government a fee to top up the lease, unlike for freehold properties. I’m personally not one for collective sales. But it is comforting to know that even an old leasehold estate such as Farrer Court could command a premium of $2.15 million per home when it went en bloc. 5. Historic figures Looking at property cycles in the last decade, analysts say the rate of appreciation of freehold homes does not always outperform that of leasehold homes. In general, the numbers show that in an upswing, leasehold properties tend to gain more, although in a downturn, they also fall more rapidly – meaning prices are more volatile. So if you buy a leasehold property and intend to hold on to your home for some time, you could easily choose to sell in an upswing instead of a downturn. All in all, I felt my anxieties dissolve when I realised that my leasehold home was affordable, will give me a reasonable yield if I choose to rent it out, and would likely appreciate – or hold – in value when transport networks are improved. Analysts say there is no conclusive evidence to show one is definitely better than the other, and that the decision you make depends mainly on budget and preference. I now realise that my home, which I love because it has four bedrooms and is surrounded by four different nature parks, was really the best choice for me, given what I could afford. My mum, in her infinite wisdom, said: ‘If history is anything to go by, you’ll be fine.’ My parents recently sold an HDB flat in Jurong after my grandmother who lived there passed away. It had aged 20 years since they bought it, yet they sold it at a price far higher than what they paid for it. See? Why worry so much, my mum chided, HDB flats are also leasehold and their values go up every year. It was a good point. I decided then I would just enjoy my first home, day by day. Source : Sunday Times – 31 Jan 2010