Source: Today Online

Letter from Cheryl Tan Cher Lin

I SIGNED the option-to-purchase for a HDB resale flat in June this year.

My first HDB appointment was in August and the second was scheduled for October.

However, the seller refused to move out of her house in October as she had not obtained the keys for her new flat.

She requested for the HDB to delay the completion of the transaction till January next year.

Doing so would incur late completion interest.

In private property transactions, this interest is deducted from the sale proceeds before it is disbursed to the seller. However, in HDB transactions, the seller has to come up with a separate cheque to pay the interest.

To my understanding, if the seller refuses to pay, I will have to resort to legal action.

I was informed by the HDB that most buyers simply ignore legal action to avoid the hassle.

Why is there a stark difference between the laws governing late completion interest in private property and HDB transactions? The laws need to be tweaked so that sellers do not abuse the system and abide by the schedule set by HDB.

Response: No difference in resale rules

HDB Letter from Loh Swee Heng Deputy Director (Resale) Housing and Development Board

I REFER to the letter from Ms Cheryl Tan, “Tweak HDB resale flat rules to prevent abuse” (Dec 11).

Ms Tan suggested that HDB follow private practice, and deduct late completion interest from the sales proceeds if there is a delay on the part of the seller in the sales completion, before it is disbursed to the seller.

For private property transactions, any deduction will depend on the terms and conditions of the contract, and with the seller not disputing the contractual right of the buyer. We wish to clarify that, similarly, for HDB transactions, if there is no dispute from the seller, the interest can also be deducted from the sales proceeds. Hence, the practices are the same for both HDB and private property transactions.

We thank Ms Tan for her feedback.

Source: my Paper

SINGAPOREANS can expect more public housing of high quality and great height – like the landmark The Pinnacle@Duxton – to replace old flats, as long as the nation continues to grow and do well, Minister Mentor Lee Kuan Yew said yesterday. So, flat prices can be expected to continue rising as Singapore’s economy improves, he added.

The Housing Board will continue to build affordable homes and the Government will help young couples own their first flats, so that “each generation of Singaporeans will continue to have a stake in the nation”, he said. But Singaporeans should not seek to make a quick buck out of the resale of HDB flats or make speculative buys, he warned.

Speaking at a ceremony of the handing over of keys to the residents of The Pinnacle@ Duxton flats,MM Lee called the estate of 50-storey blocks with 1,800 units a “significant milestone”.

It is the tallest HDB development in Singapore, the first whose design was picked through an international competition, and the only one with one of the world’s longest continuous sky gardens, formed by 12 sky bridges that link its seven blocks.

The site, located in the city centre, could have been sold to develop private condominiums, but the Government chose to build public housing there as it wanted to share “the growth of the city with the people who… built the city”, MM Lee said.

Singapore would not have stability, progress and prosperity if not for home ownership, which is vital for creating a sense of belonging to the nation, he said.

“It is critical for an immigrant community from all parts of the world, with no common history, to quickly establish their roots here. And you establish your roots when you own a new home,” he said.

He added that the pride people have in their homes has “prevented our estates from turning into slums, which is often the fate of public-housing estates in other countries”. Back in the 1960s, many Singaporeans were living in overcrowded shophouses or squatter huts. To tackle this, the Government sought to build homes as fast as it could, with the HDB building 55,000 flats within five years from its inception in 1960.

This is more than double what its predecessor, the Singapore Improvement Trust, built in 32 years.

MM Lee said: “The Pinnacle@Duxton is a strong testament to our tenacity and capabilities as a people, to get to where we (are today).

“We have yet to reach the pinnacle of our growth. The future of Asia has never looked better. The growth potential for Singapore is tremendous if we stay united and work intelligently and hard.”

Source: Business Times – Emilyn Yap

HDB upgraders account for a shrinking share of private home transactions as property prices rise and mass-market launches taper off.

In contrast, private housing dwellers are buying more property as economic sentiment improves, keeping the real estate market afloat.

According to property consultancy DTZ, buyers with HDB addresses picked up 4,065 private homes in the third quarter. This was 73 units or 1.8 per cent more than in the preceding quarter.

Though still rising in number, these deals are making up a smaller proportion of all sales. They accounted for 37 per cent of private home transactions in Q3, down from 44 per cent in Q2 and the recent peak of 56 per cent in Q1.

This reflects ‘the diminishing buying power of HDB upgraders’ as property prices rise, DTZ says. It notes that prices of private resale homes have climbed 9-22 per cent from their lows in Q1.

ERA Asia-Pacific associate director Eugene Lim points out that there were fewer mass-market launches in Q3. Encouraged by rising resale flat prices, HDB upgraders had gone for these more affordable projects in the early part of the year, reviving the property market.

But in October, the pricier Core Central Region (CCR) trumped other parts of the island in terms of the number of new private homes launched and sold. Developers pushed out 339 units in CCR, surpassing 40 in the Rest of Central Region (RCR) and 187 in the Outside Central Region (OCR).

Developers also sold 311 units in CCR, compared with 249 in RCR and 251 in OCR.

The buying mood may be wearing thin among HDB upgraders, but it is still strong among private housing dwellers. DTZ found that buyers with private addresses picked up 6,837 units in Q3 – 1,846 units or 37 per cent up from the previous quarter.

These deals accounted for 63 per cent of all transactions in Q3, rising from 56 per cent in Q2 and 44 per cent in Q1.

Buyers with private addresses ‘are more excited now’, says Jones Lang LaSalle’s (JLL) head of South-east Asia research, Chua Yang Liang. This is the result of improving liquidity, buoyant stock markets and rosier economic sentiment, he says.

Not only are private housing dwellers buying more units, they are also paying more. According to DTZ, 66 per cent of them bought units that cost more than $1 million in Q3.

On the other hand, HDB upgraders had smaller budgets. The bulk of them – or 30 per cent – went for homes that cost between $600,001 and $800,000. Just 33 per cent of them paid more than $1 million.

Some 90 per cent of transactions involving buyers with HDB addresses were for homes outside Districts 9, 10 and 11. Many of them were attracted to The Gale in the Upper Changi area, Trevista in Toa Payoh, and Parc Imperial in Pasir Panjang.

Separately, analysing transactions in Q3 according to buyers’ nationalities, DTZ found more foreigners were acquiring nests here.

There were 1,069 private home transactions involving foreigners, up 52 per cent from 703 in Q2 and more than six times 174 in Q1.

These deals accounted for 10 per cent of all transactions in Q3, up from 8 per cent in Q2.

During the 2007 boom, this figure hit 13 per cent.

Singapore permanent residents (PRs) also became more active in the property market in Q3.

They accounted for 1,404 private home transactions, 27 per cent more than the 1,104 in Q2.

Among foreigners and PRs, Malaysians bought the most homes, accounting for 26 per cent of transactions.

Indonesians took second place with a 19 per cent share, followed by mainland Chinese and Indians, with 14 and 12 per cent shares respectively.

Companies are also ramping up property purchases.

DTZ says the number of corporate transactions jumped more than four times to 225 in Q3.

Thumbs up for ending estate agents’ dual role

Respondents in public consultation exercise also want an entrance exam

Source : Straits Times – Joyce Teo

A PROPOSAL to ban property agents from representing both the seller and buyer in the same transaction has generated strong public interest – with many giving the idea the thumbs up. This practice, widespread in the HDB resale market, leaves the agent with a clear conflict of interest.

But there is likely to be resistance from some agents who stand to lose commissions if it is implemented. The proposed ban is one of a series of possible changes in a planned industry overhaul after years of complaints about questionable practices by some agents.

A public consultation exercise on a planned real estate regulatory framework drew more than 200 comments and suggestions, said the Ministry of National Development (MND) yesterday. The proposal most commented upon was the ban on dual representation.

Many respondents also backed a plan to ensure agents have a minimum entry qualification – probably an entrance exam. They felt it was important for the exam to cover ethics, given that complaints often stem from unethical practices.

Most respondents were ‘generally supportive’ of the key proposals, MND said. These also include mandatory accreditation of agencies and agents, keeping a public central registry for accredited agents, setting up an independent tribunal to resolve real estate disputes, and introducing a demerit points system.

The views received during the exercise – conducted from Oct 13 to Nov 17 – were generally consistent with feedback gathered during industry consultations a month earlier, MND said. The respondents included property agents and clients who had been caught in unpleasant encounters with agents, said a spokesman.

The Government aims to better safeguard consumers’ interests and raise the level of professionalism in the industry. Some of the key proposals are long overdue, some industry players said. Most would be welcomed by the industry, but some agents may not be happy if dual representation is disallowed.

An agent representing both sides in an HDB deal can get two commissions, even though there is clear conflict as sellers would want the highest price for their property while buyers want the lowest.

‘This practice has been around since the first day HDB flats were traded. Obviously, there will be some resistance from property agents,’ said C&H Realty managing director Albert Lu.

As HDB flat transactions can be complex, it is useful for buyers and sellers to have their own agents, to ensure that an unrepresented party does not delay or mess up the transaction, he said.

Some respondents suggested disallowing dual representation for rental deals. There were suggestions to mandate co-broking, to stipulate that all buyers are to engage an agent and to require agents to inform sellers of all offers, regardless of the offer price or agent fees.

There were also calls for a standard commission guideline to curb undercutting among agents and to protect less educated consumers, for instance.

Respondents had also called for the licensing of individual agents. While the Government had called for industry-led accreditation, some respondents wanted the Government to handle this.

Some also wanted to see minimum educational qualifications. Mr Lu felt this was unnecessary. Having paper qualifications does not guarantee an agent will act ethically, he said. Passing an entrance exam is enough, even though it does not ensure ethical behaviour. A Government accreditation board could suspend errant agents, he added.

Mr Lu felt that the entrance exam should also be conducted in Chinese, for the benefit of a group of older, experienced agents who are Chinese-educated.

PropNex chief executive Mohamed Ismail expects a central registry to come in to help control rogue agents, who are now able to switch agencies unchecked. Some respondents suggested posting the names of blacklisted agents online to warn the public.

Suggestions from the public include the use of standard forms and contracts as well as disallowing agencies and agents from buying new properties from developers with a view to selling them.

MND expects to announce key elements of the framework early next year.