VIDEOS: Second Reading & Oral Answers

SECOND READING

ORAL ANSWERS

DOUBLE STANDARDS

When the Government sells land to the developers it keeps it's reserve price top secret. 
In en bloc sales the reserve price is an open secret.

In Government land sales NO PRIVATE SALES are allowed, it's all STRICTLY by public tender.

In en bloc sales, the sale is through public tender , auction or private sale. From experience we know the tender is a statutory exercise, a sham, the real deal is done privately, behind doors, at midnight, in a very non-transparent manner.

Setting the Reserve Price

Anonymous said...

As a layman, I would like to do a simple calculation to show TC's land value based on the tender result of Waterview site which is located at Tampines Ave 1/10 and also estimate the RP of TC.

Below is the news:

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Sim Lian Land Pte Ltd has won the tender for the residential site at Tampines Ave 1/Tampines Ave 10.

The Urban Redevelopment Authority (URA) awarded the company the tender after it submitted the highest bid for the site.

The 31,740.4 square meter land parcel was offered for sale on a 99-year lease. Sim Lian Land put in a $302 million bid, translating to $4,530.79 psm/gfa. The site has a maximum permissible gross floor area (GFA) of 66,655 square meters.

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Waterview's land value is $4,530.79 psm/gfa which is equal to $421 psf/gfa.

TC's gfa is (702,157 sqft * 2.8) = 1,966,039 sqft

If we use the same land value of $421 psf/gfa, then TC's land value is 1,966,039 sqft * $421 = $827,702,419 which is equal to ($827,702,419 / 560) $1,478,040 per unit.

I believe TC is in a better location than Waterview.

A 5% increase will translate to $1,551,952 per unit.

A 10% increase will translate to $1,625,844 per unit.

The land value for TC is in the range of 1.55 m to 1.65m per unit as at now.

For en bloc sales, we must also factor in the price increase at the end of 2 years.

I think $1.6m to 1.7m is a fair estimation of RP for TC.

Regards

December 28, 2010

Excellent

I have done a quick LAYMAN computation of DC/DP for (a) increase in intensity and (b) upgrading of lease tenure from 78 years to 99 years based on Residential GPR 2.8 using SLA examples

Whilst (a) is pretty straightforward and the major part of the DC/DP,  (b)  is complete guesswork , and I have no way of knowing in advance what market value the Chief Valuer will set on a 99-year lease based on residential use at GPR 2.8. I can do a stab at it by using the 2007 figure but really, I need something more concrete than that.

Until I can get a feel for a probable value - I shall not even hazard a guess at the total DC/DP as yet. But looking at the range of probabilities from $130m to $180m

$1.7 million is about right

In the media

A mild collective sale fever

More and larger en bloc deals next year?

I told you so!

Additional Info:

Blk 118  and the new owner is from the private sector.

Interesting Trend..... more buyers are from the private sector as shown by the following chart.  This trend will push the resale prices even higher, as private owners typically have deeper pockets than HDB upgraders. As I have said before, the 5 year moratorium on reselling a HDB will also turn potential HDB buyers away from the HDB market and into the mass market properties such as ours.

Prices will therefore continue to rise. 

*Resale data is only available from after privatisation in 2002.

Ponder this...

No doubt, the pro en bloc group will latch on to the recent newspaper article about how the developers' land banks are running low and how it  is therefore a good time to go en bloc. This is their blinkered vision and not the entire picture. Developers recently benefited from the Residential Property (Amendment) Bill Nov 2010 - which allowed them to hold onto their land for longer.

Foreign developers – introduction of a new extension charge framework

The first group of key amendments relates to foreign developers who are given approval under the RPA to acquire or retain land for residential development. They are required to complete their residential development within a stipulated Project Completion Period, which is currently five years. They are then required to sell off all units in the residential development within two years from the issue of the Temporary Occupation Permit (TOP). This is to prevent them from hoarding or speculating in residential land. If they fail to meet the stipulated timelines, we may forfeit their Banker’s Guarantee, which is pegged at 10% of the land price.  

     With the amendments, the Controller of residential property will be empowered to levy an extension charge for any extension of time beyond the project completion period. The extension charge framework is essentially the same as the extension premium scheme that applies to the sale of sites under the Government Land Sales programme today. The key advantage of the extension charge framework is to make the cost of delay apparent to the developers and encourage them to complete the developments in a timely manner.      

     We will apply the same penalty regime and extension charge framework to Singapore entities which are given approval to convert to foreign entities and to retain their residential land for development and sale; as well as to foreign entities that have been granted approval to change the use of their land to residential use on the basis that they will develop the land and sell the units.

Couple that with the HOLDING POWER of developers to release their units slowly onto the market - sometimes they just prefer to rent them out  as the market climbs higher.

So, the developers are still in a cushy position and are in no rush to replenish at one go.

11,849 homes left unsold in launched private projects

Sat, Dec 18, 2010 

By Uma Shankari

DEVELOPERS are sitting on close to 12,000 unsold units in private residential projects that have already been launched.
Data compiled by The Business Times using information from the Urban Redevelopment Authority (URA) shows that as at end-November this year, developers had a stockpile of 11,849 units in projects that they have already started marketing - that is, projects in which at least one unit has been sold.
While some developments have just a handful of units left unsold, a total of 138 launched projects scattered across the island have 10 or more unsold units left. And of these, 28 projects have more than 100 unsold units each.
The more recently-launched projects include Kheng Leong's The Minton; Frasers Centrepoint's Flamingo Valley; and City Developments' Residences At W Singapore Sentosa Cove - all of which were put on the market in the first half of this year when sentiment was buoyant.
But six projects with more than 100 unsold units each have been on the market for at least three years. These include prime developments such as Keppel Land's Reflections at Keppel Bay; SC Global Developments' Hilltops; Allgreen Properties' The Cascadia; and Wheelock Properties' Scotts Square.
The 11,849 units are held by the entire range of both big and small developers and include landed projects, though the majority are condominium developments.
Market observers say the stockpile could have been accumulated as developers typically roll out units in large developments in phases.
Those with strong holding power may also hold back some units in their projects as part of a larger marketing strategy. Keppel Land, for instance, did this with its Caribbean At Keppel Bay condominium.
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But the ample supply of ready-to-buy homes should show prospective homebuyers that there is no need to rush to pick up units in new launches, said another industry veteran.
Homebuyers snapped up 1,909 new private homes in November even as developers launched a strong supply of 2,329 new homes for sale. The strong demand from buyers took the total sales volume for 2010 to a record 15,025 units - even higher than the then-record 14,811 homes sold in 2007 during the last property boom.

'The fact that we have recovered so quickly from the financial crisis has given a lot of false confidence to many people with money,' the industry veteran said. 'They think that it is the right time to jump into property.'

In October, URA said that at the end of Q3 2010, there was a total supply of 64,358 uncompleted units of private housing from projects in the pipeline. Of these, 33,771 units were still unsold. The numbers include both launched and unlaunched projects.
But data compiled using URA's monthly update on the number of units launched, sold and unsold in residential projects in Singapore, released yesterday, showed that as at end-November, there were 11,849 units left unsold in launched projects.

This article was first published in The Business Times.

Collective Sale of Tampines Court

There have been rumors made about how an EOGM for a collective sale is imminent. I was asked if I had heard the 'good news' by a fellow resident. Alas, I think his jubilation might be a little bit premature as the en bloc group is still only procuring the necessary signatures for a proper requisition. They are possibly inept at the job  but I have no doubt they will achieve their goal. They are hoping for an EOGM in January, so look out for an announcement soon.

They have taken an inordinately long time getting the necessary 20%. - seeing as they started months ago. The flipper, property agents et al have been canvassing  non stop, knocking on doors, walking around, making cold calls.   Could they be possibly saying something like:-

• En bloc is inevitable (no it isn't)
• Everybody is interested (no they aren't)
• The en bloc will go through for sure (how do they know?)
• The new rules make everything safe (rubbish)
• We have your best interests at heart (more rubbish)
• The lifts have a 25/30 year lifespan only (no they don't)
• The BCA requires that lifts be replaced (no it doesn't)
• We need only a few more signatures (an agent's favourite sales pitch)
• Now is a good time to sell (you never can tell)

I would like to take issue with a corner cutting measure made by the pro-en bloc group. They have not done an estate-wide poll to gauge the level of support, preferring instead to gather the bare 20% and not bother to find out the views of the rest. Perhaps they are afraid that the level might only be hovering around 40% - in which case it would be pointless to go ahead. There is no LTSA requirement to conduct such a poll,  but it is something I would have expected a conscientious group of owners to have done, especially as the estate has gone through one bruising en bloc attempt already.

But pro-enblocers are generally not the conscientious type.  The flippers want to turn a quick profit. The backers tend to have pressing financial reasons to sell.

Our Minister of law, Mr. Shanmugam had something to say on the issue in the Second reading of the LTSA Amendment Bill:

"Our view is that such repeated attempts especially frivolous ones should be discouraged.  If there is no prospect of an en bloc sale succeeding, then owners should not be harassed, nor should owners be worn down or be subjected to attrition tactics.  The owner's right to live in peace and not be subjected to repeated attempts should be respected."

 

"Now, really, there can be no objection in principle to require that before you restart the entire process, you have to make sure that you are going to succeed."

 "Yes, we could do that, but there is the other aspect which I have emphasised, which is in a development, people if they have made their views extremely clear, and there is no realistic prospect of success, should not be bothered again and again."

Holding an EOGM does not automatically mean a sale committee will be formed, it will all depend on the wishes of the simple majority (50%+1) of those attending or by proxy. So it is vital that as many owners as possible should attend for it to be a true reflection of the estate's  sentiment and direction.

Hawaii Tower up for en bloc sale
Business Times- 3 Dec 2010
Tulip garden put up for collective sale
CNA - 6 Dec 2010
Tulip Garden up for sale again - at $650m  
AsiaOne - 7 Dec 2010

GETTING SMALLer and smaller.........

PLEASE NOTE THE POSTS UNDER THE REPLACEMENT COST LABEL ARE OLD POSTS AND HAVE NOT BEEN UPDATED IN A LONG, LONG TIME

Average home sizes shrink

With the development of shoebox apartments and a bigger proportion of smaller units in condo developments, the average size of non-landed homes used to estimate housing supply in the GLS Programme has shrunk.

To arrive at the average size for every home assumed, The Business Times chose sites by location and then divided each of their gross floor area (GFA) by the number of potential homes estimated by the government for every site.

BT said a change in the average home size was initially introduced for sites located in the Rest of Central Region (RCR) in the 2H2010 GLS Programme and extended to include the Outside Central Region (OCR) in the 1H2011 Programme.

Based on BT’s comparison, the average size per home for non-landed residential sites fell from around 110 sq m in the 1H2010 GLS Programme to about 100 sq m in the 2H2010 Programme and 90 sq m in the 1H2011 for residential sites in the RCR, which includes Alexandra Road, Stirling Road and Bishan.

Meanwhile, for sites in the OCR, where suburban condo developments are located, the average housing unit size did not change until the 1H2011 programme.

A spokesperson for the URA said it “regularly reviews the space standards, that is, gross floor area per housing unit, used to estimate the number of housing units that can be generated from GLS sites for residential developments . . . The review takes into account the size of residential units in housing projects which have obtained planning approval.”

“The space standards, which vary for different locations, are used as a guide only. The actual number of residential units on the GLS sites will depend on the actual development plans of the developers.”

Market watchers noted that a series of projects with a large number of shoebox units started in RCR locations such as the Guillemard area, Alexandra Road and Rangoon Road. Since then, shoebox units have appeared in other locations including Eunos and Kembangan, which are categorised OCR, and spread to the Core Central Region (CCR) like Killiney and River Valley.

Joseph Tan, executive director of CB Richard Ellis (CBRE), said the proportion of units below 1,000 sq ft has increased lately even in more mainstream condo developments. “In city-fringe locations, particularly near MRT stations, up to 50-60 percent of units could be below 1,000 sq ft and the proportion could be even higher in some projects in the CBD,” said Mr. Tan.

Source : PropertyGuru – 2 Dec 2010

Enjoy your spacious home... soon only the very rich can afford to live like you.