Upgrading programmes at HDB estates get a boost

Housing Board upgrading programmes were given a boost yesterday as the Government announced fresh moves to spruce up more neighbourhoods, touch up ageing flats and replace old lifts.

The enhancements are aimed at keeping ageing estates in good condition, National Development Minister Khaw Boon Wan said yesterday.

“Many residents with blocks and neighbourhoods that have not yet been upgraded are impatient,” said Mr Khaw, who was speaking at the HDB Awards ceremony at Shangri-La Hotel. “They, too, want to benefit from the new features immediately.”

The Government will be paying for most of these upgrading programmes.

One of the changes announced is to speed up the pace of the Home Improvement Programme (HIP), which addresses maintenance issues such as structural cracks in flats built in or before 1986.

Some 100,000 flats, out of the 300,000 eligible, will be selected next year. Over the next two years, 50,000 flats will be upgraded annually. This is up from the current 35,000 annually. Homes selected will have an option to include elderly-friendly fittings.

More than 120,000 flats have been offered the upgrade so far, with citizen households fully subsidised for essential upgrades. They pay between 5 per cent and 12.5 per cent of the costs for optional improvements, such as door replacements.

“Early selection of HIP blocks will… enable the owners to decide better whether to wait for the HIP or to proceed first with their own renovations,” said Mr Khaw.

The Neighbourhood Renewal Programme (NRP), which improves neighbourhood facilities, will also expand to include HDB blocks built between 1990 and 1995. Previously, this applied only to blocks built in and before 1989.

This means that another 100,000 households in more than 1,300 blocks, mostly in middle- aged towns like Chua Chu Kang, Pasir Ris and Tampines, will benefit from the programme.

The scope of improvements under the NRP will also be broadened to include block repainting and other repairs, which were previously done under the town councils’ routine maintenance.

The Government will also replace ageing lifts which were not targeted in the Lift Upgrading Programme, said Mr Khaw.

The new Selective Lift Replacement Programme will replace about 750 lifts mostly in Chua Chu Kang and Pasir Ris. The new lifts will come with better safety and security features, like vision panels and motion-sensing doors.

About 33,000 households will benefit from this programme, which will be funded by HDB and the town councils.

Chua Chu Kang GRC MP Zaqy Mohamad said his residents have been asking for such lift safety features for many years.

Statutory board manager Alex Seo, 31, said many residents who go home late at night will appreciate the vision panels.

Trainer Wong Peng Thim, 58, who lives in Block 232, Pasir Ris Drive 4, is looking forward to getting covered walkways and sheltered drop-off porches under the NRP. “Having no walkways makes it inconvenient for us to get home when it rains.”

Mr Khaw said the moves will raise the overall standard of living for residents.

“Every new HDB town should be better than the old town. Every old town should not be too far behind the new town.”

Source: The Straits Times – 11 September 2014

HDB details plans for three new housing districts

The Housing and Development Board (HDB) on Tuesday unveiled detailed plans for the first housing projects in Bidadari and Tampines North, as well as for Punggol Northshore – one of seven new waterfront housing districts in Punggol.

Punggol’s Northshore District will be the next one to be developed after the Matilda District. It will offer about 6,000 new flats, with the first project slated to be launched in 2015.

New technologies will be employed to make the district “smart and sustainable”. In fact, Northshore will be the first district to test-bed smart technologies in public housing.

It will feature intelligent car parks (which automatically increase the number of available lots during non-peak hours for visitors, as residents with season parking tickets are out in the day), smart lighting (lighting with sensors which will be reduced in common areas with little or no human traffic detected), and smart waste management (whose sensors will monitor waste disposal patterns before the data is analysed to optimise the deployment of resources needed for waste collection).

The smart waste management system will also be set up in the first housing precincts in Bidadari and Tampines North.

The Northshore District will also have varied building heights to capitalise on the sea views and a seafront commercial centre. Its blocks will also be installed with solar ready roofs.

HDB’s first public housing project in Bidadari will be in the Alkaff neighbourhood, and will be launched in 2015. It will feature community malls, garden courtyards, a verandah for recreational and community events, roof gardens and community terraces atop the multi-storey car parks and selected residential blocks.

As for Tampines North, the Park West District will be the first to be developed, comprising 1,500 flats. It will be launched in November this year. In fact, the four housing districts in Tampines North will be designed around a “leaf” concept, like an extension or “green shoot” of Tampines Town, each with its own comprehensive network of green spaces, HDB said.

Source: Business Times – 10 September 2014

Those outliving lease under LBS won’t be left homeless

The Ministry of National Development (MND) made it clear on Monday that under the Housing & Development Board’s (HDB) lease buyback scheme (LBS), those who outlive the remaining lease of their flat will not be left homeless.

The ministry is also studying the option of insurance for the elderly to insure against the likelihood of their outliving the lease.

Minister for National Development Khaw Boon Wan noted, however, that such an insurance scheme “cuts both ways”.

The benefits of such insurance are restricted only to a minority who outlive the lease, while there is downside for the majority, who will have to forfeit having any unconsumed lease refunded to their estate beneficiaries.

“Our commitment is nobody will be left homeless,” Mr Khaw said. “The HDB will look into the circumstances of each case to work out an appropriate housing arrangement, taking into account the elderly’s health condition, financial status and the availability of family support.”

Mr Khaw was fielding questions from Members of Parliament (MPs) who raised concerns about the elderly outliving their retained leases under the LBS, which allows the elderly to monetise their flat by selling the tail-end of the lease to the HDB.

MP Baey Yam Keng asked the Minister if the HDB could specify the value of lease extensions when an elderly signs up for the LBS. Mr Khaw explained that the government “cannot commit to something so uncertain” due to the market vagaries of property prices.

Those who are concerned about outliving their lease can take up the option of retaining a maximum lease of 35 years under the enhanced LBS from April next year, he said.

Under the enhanced LBS that kicks in next April, joint flat owners only need to top-up to half the age-adjusted Minimum Sum, which allows them to receive more proceeds in cash than before, but still subjected to a cap of S$100,000. The scheme is also extended to four-room flats and households with income of up to S$10,000.

Mr Khaw pointed out that as for LBS flat owners whose flats are selected for the Selective En bloc Redevelopment Scheme (SERS), they will receive compensation for the residual lease of their flat and also SERS rehousing benefits. Compensation for the residual lease will be based on either the market value or the stated refund value, whichever is higher.

Other MPs also asked how the HDB determines the value of the lease under the LBS.

Mr Khaw explained that the flat is valued by a professional private valuer appointed by the HDB, based on widely accepted industry standards and valuation practice. But how the value is split between the front-end retained lease and the tail-end sold lease is “not a straight line depreciation” due to the time value of money and that property with a shorter outstanding lease depreciates faster than one with a longer lease.

Going strictly by industry valuation standards, valuers are likely to value the tail-end of the lease much lower than the lease retained by the owner, Mr Khaw said. This is why the HDB disallows subletting of the entire flat or resale under the LBS, he added. “When valuers value the front-end of the lease to be retained, they take that into account and discount it, so instead of the 75-25 split, it then ends up roughly 60-40.”

The significant improvement of value of the tail-end lease sold to the HDB results in higher cash proceeds for the owners – making the LBS “a lot more attractive and meaningful to the owners”, Mr Khaw said.

He noted that the property cycle can affect all monetisation options, whether it is lease buyback, right-sizing or disposing the flat.

The key is to make sure that there is proper counselling so that the flat owners are fully aware of the options and do not rush into making a decision, he said.

Source: Business Times – 9 September 2014

Lease buyback: 75% of elderly HDB households can benefit


Three in every four elderly HDB households can benefit from the enhanced lease buyback scheme (LBS), up from 35 per cent previously. But a huge jump in take-up rates of the scheme is unlikely, said Minister for National Development Khaw Boon Wan on Wednesday.

Other enhancements to the LBS, which will also kick in from April next year, are aimed at offering households greater flexibility on the length of lease to retain and the amount of proceeds to be received in cash upfront – issues that naysayers of the scheme have earlier picked at.

Mr Khaw said that he expects the take-up rate for the enhanced scheme to increase by a few hundred or thousand, but not jump by “tens of thousands”.

Many residents that he spoke to in his Sembawang GRC hailed the LBS enhancements “a good idea” but expressed that they will not tap the scheme now as they are financially supported by their children or have passive income from subletting a room.

“But it does not matter whether it is a thousand or ten thousand. The scheme is there and we will make sure that it will be implemented the way we have described it,” Mr Khaw said.

The scheme has seen a low take-up rate since its inception in 2009, when it allowed elderly households in three-room or smaller flats to retain a 30-year lease and sell back the remaining to HDB. The sales proceeds are used to top up their CPF Retirement Account (CPF RA), which can in turn be used to buy annuity plan.

So far, only about 800 households have signed up for the scheme, of which some 340 households joined only after some enhancements were made in 2013.

According to MND, Singapore is in a sweet spot for the enhanced LBS given that 80 per cent of the 290,000 HDB flats owned by seniors aged 55 years and above are fully paid-up and sitting on net equity.

Besides extending the scheme to four-room flats, the government is raising the household income ceiling from S$3,000 to S$10,000. Households joining the scheme can also choose the length of the lease to retain, up to 35 years, based on their age and preferences, instead of having one standard 30-year lease.

Instead of topping up their CPF RA to the full age-adjusted Minimum Sum, joint flat owners need to top up to only half of their Minimum Sums. This allows joint owners to receive more cash upfront, but still subject to a cap of S$100,000.

But Mr Khaw urged the elderly to exercise prudence with the excess cash proceeds – a point that he also stressed in his blog on Wednesday.

“While these enhancements are good, I do worry about some elderly spending unwisely away the substantial cash proceeds,” he blogged. “For example, many overseas properties are being marketed here. There are bound to be disappointments and even losses.”

The elderly have the option of voluntarily using these cash proceeds to top-up their CPF RAs or their spouses’ CPF RAs, Mr Khaw said.

ERA Realty key executive officer Eugene Lim noted that while the pool of eligible households is expanded, this is unlikely to cause a dent to the supply of resale flats in the market.

There remains a prevailing mindset among the elderly that the HDB flat is an asset that they wish to bequeath to the next generation, he said.

Mr Khaw told reporters that the scheme is continually reviewed to stay relevant to its targeted beneficiaries as their preferences and life expectancies change over time.

He also conceded that any changes in HDB resale prices could temporarily affect the scheme’s demand, since the value of the lease is calculated based on prevailing market value. But there are bound to be market upturns and downturns within a 30-year lease period, he said, adding that this is a long term scheme.

Source: Business Times – 4 September 2014

Khaw: Lease Buyback scheme may be made more flexible

The government is studying ways to make the Lease Buyback scheme more flexible to suit senior citizens joining the scheme at different ages.

These could include varying the number of years that a senior can retain his HDB flat’s lease when he joins the scheme and sells part of his flat’s lease back to the Housing Development Board (HDB).

Minister for National Development Khaw Boon Wan said this on Sunday, during a post-National Day Rally dialogue for Sembawang GRC, according to reports from The Straits Times and Channel NewsAsia.

Currently, those who join the Lease Buyback scheme retain a fixed portion of 30 years on their flats’ leases, and sell the rest back to HDB for proceeds that are used to top up their Central Provident Fund (CPF) retirement account for annuity payouts.

Details of changes to the scheme are set to be announced in the coming week. These details follow Prime Minister Lee Hsien Loong’s announcement during his National Day Rally last month, that the Lease Buyback scheme will be extended to include four-room flats.

Previously, only owners of three-room or smaller flats were eligible.

That change will mean that 75 per cent of seniors are now eligible for the Lease Buyback scheme, up from 35 per cent previously, Mr Khaw said on Sunday.

But depending on when they join the scheme, some could find the 30-year lease retention period too long or too short. “Many are rightly concerned about outliving the lease,” The Straits Times quoted him as saying. For those who join the scheme when they are older, such as at 80, however, the 30-year lease might be too long.

Source: Business Times – 1 September 2014

Resale market for Tanglin Halt hotting up

Housing Board flats in Tanglin Halt are hitting the resale market and starting to fetch premiums after June’s announcement that the estate will be redeveloped.

At least two units have been sold since then, with more than 30 listed on property websites.

Such flats are attractive because their owners will eventually be offered brand new units at five sites in the nearby Dawson estate in Queenstown under the Selective En bloc Redevelopment Scheme (Sers).

In prime locations such as Queenstown, resale units are pricey and Build-To-Order projects scarce, so the Sers exercise is a good chance to secure a flat there, said agents.

Most of the 3,480 units across the 31 blocks in Tanglin Halt Road and Commonwealth Drive are two- and three-room flats. The replacements range from two- to five-roomers, with larger units popular with families, said agents.

To give owners time to consider their options, there was a month-long freeze on resale applications. This ended on July 27, and applications can be submitted up till Aug 31 next year.

In anticipation of demand, property agents have been leaving fliers in letter boxes and going door to door in Tanglin Halt.

The attraction of a Sers flat was clear in the case of a Tanglin Halt three-roomer which was sold last week. A flat had been marketing it since February, with an asking price of $310,000 to $315,000.

There were no takers initially. But interest rose after the Sers announcement, and the flat went for $355,000, about $35,000 above its valuation.

Some Tanglin Halt owners might want to sell so they can upgrade to private property. Another reason is that the replacement units are expensive, said agents and flat owners.

Even though they are subsidised, estimated prices for three-room replacement units at Dawson range from $284,000 to $386,000, according to the HDB.

“Actually, a resale flat somewhere else might even be cheaper,” noted a flat owner who wanted to be known only as Mr Teh.

In the second quarter this year, the median price of a three-room flat was $357,000 in Queenstown, and as low as $311,000 in Yishun.

Mr Teh, a 34-year-old who works in sales, is open to the idea of selling his three-roomer in Tanglin Halt. But he has not decided whether to do so yet as the prime location of the replacement flats is still a draw. “You cannot find another place as good as this,” he said.

The drawback of selling, of course, is missing out on a prized new flat in Dawson.

This is why transport driver Ngeow Chee Hoe, 41, does not plan to sell his three-roomer: “The new flats will be of high value.”

For many older residents, there is a simpler reason for not selling: being able to stay in a familiar, convenient place.

Said retiree Arif Supaat, 74: “This place is easy for me to get around: There are the buses, the MRT, it’s near the mosque.”

Retiree Helen Lee, 70, agreed, adding: “If you move somewhere else, you won’t know the neighbourhood any more.”

Source: The Straits Times – 26 August 2014

Lease Buyback: ‘Better, but limited take-up expected’

While letting owners of four-room Housing Board flats sell part of their lease back to the Government is a good move, it will probably appeal to only a small section of the population, said property experts and academics.

They do not expect a spike in applications in response to this extension of the Lease Buyback Scheme, which was previously for three-room and smaller flats. Rather, the scheme will continue to have a limited appeal, they said – to low-income households who are short of retirement funds on the one hand, and savvier owners on the other.

Under the scheme, flat owners sell part of their flats’ lease back to the HDB. The proceeds from selling the lease are used to top up owners’ Central Provident Fund (CPF) Retirement Accounts, for larger monthly payouts under the CPF Life scheme.

The required top-up level is the Minimum Sum for those aged 70 and younger, and slightly less for older flat owners. The owners will receive the funds in excess of this as cash.

Response has been lukewarm since the scheme’s launch in 2009. As of last month, just under 800 households have benefited.

“There is likely to be a better take-up than the current state of things, but we do not expect a surge,” said ERA Realty key executive officer Eugene Lim.

One obstacle to a wider take-up is the fear of outliving one’s lease. Under the scheme, flat owners keep the next 30 years of their lease and sell the rest back to the HDB.

The HDB has said that “no elderly flat owner will be left homeless” and that “appropriate housing arrangements” will be provided for flat owners who cannot pay for a lease extension.

But it is unclear what this means and the big fear is that the flat owner will get chased out of his home, said experts.

Another obstacle is cultural. Many Singaporeans wish to keep their flats so they can leave them for their children.

“This bequest motive is a very strong motivation,” said National University of Singapore Associate Professor Chia Ngee Choon.

It is thus the “more open-minded, more educated or investment-savvy” home owners who may be comfortable with this option.

But investment-minded owners have other reasons to be reluctant. Flats under the scheme cannot be wholly sublet or resold, thus limiting their options.

Subletting out the entire flat for rental income would probably derive greater returns compared to payouts by CPF Life.

The median rent for a flat was $2,300 last month.

About one in 10 flat owners above 55 either sublets a room or the entire flat for income, said the HDB.

It added that the scheme is aimed at low-income owners with limited monetisation options, which is why it was not previously open to larger flats.

Civil servant Lim Swee Leong, 59, owns a four-room flat and could qualify for the scheme when he retires. But he, too, sees it as being chiefly for the lower income.

“For me, it’s quite different because I don’t need the money,” said Mr Lim.

There is the off chance that the scheme will generate a lot of demand, which would mean that the Government has to buy back many leases, which will cost it a tidy sum.

But NUS Associate Professor Albert Tsui noted that the Government is buying an asset which it can resell or use as rental housing.

“You can see it as just a transaction. It should not be a big problem,” said Prof Tsui.

Source: The Straits Times – 19 August 2014

Pinnacle of HDB flat resales soon?

The first flat from premier Housing Board project Pinnacle@Dux- ton has hit the market, with its owner obtaining special permission from the authorities to sell the unit.

The four-room flat, with a floor area of 90 sq m and located “above the 20th floor”, has been on the market for about a month. But it has already had more than 50 viewings, said Mr Bruce Ang, one of two agents marketing the unit. He said that several “verbal offers” have been received, the highest being $830,000.

The unit is being sold despite the owner not having lived in the unit for five years, which is a legal requirement known as the minimum occupation period (MOP).

Most Pinnacle@Duxton home owners will meet this MOP in December.

But the HDB has allowed the early resale of the unit “with a short deviation from MOP, after considering the flat owners’ circumstances”, said a spokesman.

A Straits Times check showed there were at least eight other units listed on various property websites. All but one – a five- roomer – are four-room flats.

An agent behind a listing of a 38th-storey four-roomer, Mr Benjamin Tan, said that the owner is “not in a rush to sell”, but simply sounding out the market.

Comprising 1,848 units in seven 50-storey blocks, the project in Tanjong Pagar faced overwhelming response at its launch in 2004.

Its four- and five-roomers have long been expected to fetch high resale prices, with National Development Minister Khaw Boon Wan himself saying in 2012 that when the Pinnacle@Duxton flats hit the market, “there will be many millionaires there”.

In 2004, new four-room flats there cost $289,200 to $380,900. Its five-room flats were priced from $345,100 to $439,400.

Though the resale market has been cooling over the past year, large flats in prime locations are still fetching high prices. Two four-roomers in nearby Tanjong Pagar Plaza went for $730,000 in June and $710,000 in March.

Six five-roomers have been sold in nearby Cantonment Close so far this year, all going for above $800,000.

PropNex Realty chief executive Mohamed Ismail Gafoor expects the Pinnacle@Duxton flats to fetch handsome prices in the resale market. “I will not be surprised if people even pay $1 million for a four-room flat there. It’s an iconic building in a really good, central location.”

But R’ST Research director Ong Kah Seng pointed out that the ongoing cooling measures would make it difficult to achieve benchmark prices. “Prices for five-room flats are unlikely to go beyond $850,000, as the mortgage servicing ratio cap is expected to restrain excessively large loans,” he said. “Resale competition from other sellers in the locality will also drive prices down.”

But that has not stopped agents from aggressively hawking their services to residents there. Pinnacle@Duxton residents said property agents have been going door-to-door and calling them at home, particularly in the last few months. Namecards and fliers offering to help sell their flats have also been left in letterboxes and at individual units, said residents.

But for many of them, selling is the furthest thing on their minds. “We are not planning to sell. It’s difficult to find such a central location elsewhere. We can easily jog or cycle to Marina Bay,” said offshore diver Muhd Shaifullah Latif, 30, who lives in a 28th-floor four-room flat with his wife.

Many are also reluctant to uproot because of their children. “My kids go to school in this area, so moving would (disrupt) their schooling,” said housewife and mother-of-two Joanne Lee, 34, who lives in a five-roomer there.

– See more at: http://www.straitstimes.com/archive/saturday/premium/singapore/story/pinnacle-hdb-flat-resales-soon-20140809?tokenSvcs=bts&stp#sthash.B7zxjV9y.dpuf

Source: The Straits Times – 9 August 2014