Property News!

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Parliament approves Land Titles (Strata) Bill governing en-bloc sales

20 September 2007 1627 hrs

SINGAPORE: Parliament has approved changes to the Land Titles (Strata) Bill, which clearly stipulates the proper conduct of en-bloc sales.

Moving the second reading of the bill in Parliament on Thursday, Law Minister Professor S Jayakumar said it aims to provide additional safeguards and greater transparency for all owners involved in en-bloc sales.

It will also ensure that their interests are taken into consideration more adequately.

One of the changes requires the sales committee to call for a general meeting to discuss issues such as the appointment of a lawyer, property consultant and marketing agent.

The measures also seek to improve transparency in the en-bloc sales process by providing regular updates on bids received and how sales proceeds will be divided.

The amended law also helps owners better understand the legal implications of en-bloc sales. - CNA

 

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Sep 19, 2007
Horizon Towers majority owners break ranks ahead of court battle
Some approach HPL group to seek resolution, avoid possible payout
By Joyce Teo
SOME majority owners at Horizon Towers have broken ranks ahead of a courtroom showdown with a developer over the condominium's bungled $500 million collective sale.
Some owners, keen to avoid the potentially costly legal battle, have written to the Hotel Properties-led (HPL- led) consortium which agreed to buy the condominium in February.

A group of them say they are willing to sell their units to the consortium at the price agreed before the deal hit a brick wall. Another group of owners say they want to comply with the contract or seek any peaceful resolution.

HPL chief Ong Beng Seng and the consortium's lawyers from Allen & Gledhill have agreed to meet these owners today, sources said.

The legal action, alleging breach of contract by the sellers, is due in the High Court on Thursday next week.

The consortium is seeking damages of more than $800 million - and if successful, that means every majority owner could face a massive payout.

The sellers now appear to be in disarray, having ignored a Sept 11 deadline given by the buyers for them to extend the sale completion date.

By the time the deadline came around, the sellers had no one to represent them as three remaining members of the sales committee had quit at a meeting on Sept 7. That meeting was attended by more than 200 sellers.

Sellers from 20 units who are keen to extend the sale completion date have called for a new meeting to elect a new sales committee. It has been scheduled for tomorrow evening.

HPL and its partners - Morgan Stanley Real Estate-managed funds and Qatar Investment Authority - had come in after the Horizon Towers tender closed in August last year without attracting a buyer at the $500 million reserve price.

But the sale fell through after the Strata Titles Board (STB) threw it out over a technical error in the sale paperwork last month.

The buyers then asked the sellers to extend the sale deadline by four months so that they could appeal against the STB ruling or try to refile the sale application.

If the sale had gone ahead, owners of 199 apartments would have reaped about $2.3 million each, while owners of the 11 penthouses would have received at least $4 million each.

Observers say HPL and its two partners will want to buy the site as a whole, which requires consent from the majority of the owners, and not individual units as some owners are proposing.

The buyers have asked the court for a 'representative order' which was served on all the owners yesterday.

If the High Court grants the order, any final judgment obtained against the seven defendants - who are sale committee members - will bind all the sale committee members and majority owners.

In an affidavit accompanying the summons, HPL said it would be 'administratively inconvenient and extremely costly' to pursue each of the 270 sellers as defendants.

Besides, the sellers have contracted with them on identical terms, it says.

Many others are waiting for the High Court hearing next Friday on their appeal to quash the STB order, before deciding on their next step.

They are mostly under major stress, faced with the prospect of possibly coughing up millions in damages. Some of them, including sale committee members, have sought their own legal advice.

More lawyers have jumped into this case, which already involves several firms and well-known lawyers.

 

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Sep 19, 2007
En bloc sellers 'set to spend over $4b buying new homes'
Savills expects sales to pick up as owners get paid and seek replacement homes
By Fiona Chan
CASH windfalls will soon be arriving for the hundreds of home owners who sold their property en bloc during the frenzied April to June period.
As they look for new homes, they could pour more than $4 billion into the market by early next year, according to new estimates from Savills Singapore.

The property consultancy said the 'bunching up' of collective sales in the second quarter will yield almost $6.4 billion in total collective sale proceeds.

Most of the amount is due to come in between December and February, which is likely to prompt a pickup in market activity, said Mr Ku Swee Yong, Savills Singapore's director of marketing and business development. Assuming some sellers already have second homes, those who need a new place to live in will have about $4.2 billion to spend, he said.

His calculations showed that about 2,800 units were sold en bloc between April and June, for an average of $2.3 million a unit.

But he estimates that only about two-thirds of the owners will buy replacement homes. Still, this means almost 1,900 units in move-in condition will be needed in the months ahead.

Buyers are likely to seek these homes in areas such as Bukit Timah, Upper Bukit Timah, Clementi, Novena, Upper East Coast and Bukit Panjang, added Mr Ku.

This is because the bulk of the collective sales during the period were in the prime areas of Districts 9, 10, 11 and 15. Together, these cover Orchard, Holland, Bukit Timah, Newton and the East Coast.

Some of the larger projects sold en bloc in April-June include Farrer Court and Leedon Heights on Farrer Road, with more than 900 units between them. All these projects are in District 10, said Savills. In this prime district alone, 1,600 units were sold for $4.3 billion, it added.

'Sellers in Districts 9 and 10 are likely to look for new homes in Districts 11 and 21 - Bukit Timah and Upper Bukit Timah,' said Mr Ku. 'Even if they have money to stay in the centre of town, they may have nothing to buy, as most of the older projects have already gone en bloc in the last two years.'

On the other hand, Bukit Timah and Upper Bukit Timah 'have plenty of projects and not many collective sales', he added.

He expects en bloc sellers to be out in full force buying new homes starting from December, thanks to the record run of collective sales this year - such deals from January to June hit almost $10 billion, according to Savills.

'Almost all such sellers get their money within nine months of the sale,' Mr Ku said, adding that Strata Titles Board sale approval takes about six months.

He added it has proven difficult for some sellers to buy a new home using a bridging loan. 'So most of them won't be able to buy a replacement unit until they actually get money in hand.'

 

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Parliament approves Land Titles (Strata) Bill governing en-bloc sales

20 September 2007 1627 hrs

SINGAPORE: Parliament has approved changes to the Land Titles (Strata) Bill, which clearly stipulates the proper conduct of en-bloc sales.

Moving the second reading of the bill in Parliament on Thursday, Law Minister Professor S Jayakumar said it aims to provide additional safeguards and greater transparency for all owners involved in en-bloc sales.

It will also ensure that their interests are taken into consideration more adequately.

One of the changes requires the sales committee to call for a general meeting to discuss issues such as the appointment of a lawyer, property consultant and marketing agent.

The measures also seek to improve transparency in the en-bloc sales process by providing regular updates on bids received and how sales proceeds will be divided.

The amended law also helps owners better understand the legal implications of en-bloc sales. - CNA

Sep 20, 2007
More transparency to en bloc sales
ADDITIONAL tweaking has been proposed to the amendments to the Land Titles (Strata) Act after it was announced by Deputy Prime Minister and Minister of Law, Professor S Jayakumar earlier this year.
In parliament today, Prof Jayakumar elaborated on added refinements to the Bill, which focuses mainly on enhancing transparency and providing additional safeguards for owners involved in en bloc sales.

Previously, changes included the additional consent requirement by number of units, empowering the Strata Titles Board (STB) with the power to increase the sale proceeds in cases STB deems suitable and to issue guidelines on allowable expenditures.

Acting upon feedback derived from public consultations conducted by the Ministry with more than 100 respondents and 40 industry players, the further requirement in the Bill will now be based on the area of lots as shown in the subsidiary strata certificates of title, instead of the number of units.

Prof Jayakumar explains that 'the consent by number of units could result in owners of large commercial units subdividing their property into many strata lots' so as to create additional votes for themselves.

'This will defeat the intent of adding the second consent requirement, which is to mitigate the current bias against residential owners in a mixed development.'

He added that it will not be fair to owners with large units as consent by number of units 'means that a commercial unit will have exactly the same voting right as a residential unit notwithstanding that the commercial unit may be many times larger in size'.

Under the review, the Bill will now have two schedules to provide rules to regulate the formation of sale committees and their proceedings. The rules have been adapted from the provisions in the Building Maintenance and Strata Management Act (BMSMA) 2004.

The new Bill will contain provisions to address the issue of owners not knowing what is contained in the Collective Sale Agreement (CSA) and make the sale process more transparent.

But many MPs raised their doubts about social problems that come along with the heated en bloc market, such as the trauma of uprooting for families and the elderly.

Sembawang GRC MP Ellen Lee urged the government to 'strike a balance between ghettos and protecting the elderly'.

More importantly, she stressed for the government to develop a set of guidelines so as deter harrassment and unprofessional developers and marketing agents.

Ms Lee's query echoed the sentiments of many others, including Tampines GRC Irene Ng, who pointed out the need to impose greater discipline on marketing agents.

Besides this, Ms Ng also proposed that developers can offer residents replacement in the same area at an affordable price so that those who wish to do so, can.

In conclusion, Prof Jayakumar stressed that these changes are to 'provide additional safeguards and greater transparency for all owners involved in en bloc sales', both minority and majority owners.

'I would like to reiterate that the amendments to the en bloc sale legislation maintain a careful balance.

'They provide additional safeguards and ensure greater transparency for all owners, but at the same time, have been drafted in such a way as not to make it unduly onerous to bring about an en bloc sale.'

 

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En bloc sales boosting housing rentals in Singapore: analysts

21 September 2007 2221 hrs

SINGAPORE : Housing rentals in Singapore have risen faster than property prices, a phenomenon that is unique in this region.

Property analysts have pointed the finger at collective, or en bloc, sales, but they say they are not expecting rents to drop sharply even when the redevelopment projects are complete.

The price of housing in Asia has risen as a whole in recent years. Over in Hong Kong, South Korea and China, property prices have increased faster than rentals but here in Singapore, it is the reverse.

Rentals for private residences in the Republic jumped 10.4 percent in the second quarter, while property prices rose by a more modest 8.3 percent.

Analysts have pointed the finger at collective sales, which quickened in pace in the last 18 months.

Donald Han, Managing Director, Cushman & Wakefield, said: "I think the phenomena of rental increase in residential is purely because of the collective sales fever that you've seen in the last two, three years.

"There has been a lot of the older stock which went under the redevelopment block of the collective sale and there was not enough replacement for the new properties."

The displacement is particularly acute in Districts 9, 10 and 11, where collective sales activities were highest.

Looking ahead, analysts say that investors should expect rents to stabilise or correct downwards once supply comes back.

Colin Tan, Head of Research and Consultancy, Chesterton, said: "I suppose the properties that are being redeveloped when they're completed... prices or rentals will stabilise. Whether they will come down or not will depend on, I suppose, the prospects for the Singapore economy.

"I think there is a lot of talk that more foreigners will be coming due to the added attractions of the F1, integrated resorts. So we have to see. If the demand is good, the correction may be just slight."

Between the second half of this year to 2010, 43,018 private housing units are expected to be completed. - CNA/ch

 

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Sep 25, 2007
HPL to ask to adjourn Horizon Towers hearing on Thursday
Decision follows official confirmation of extension of sale deadline to Dec 11
By Joyce Teo
THE move by the Horizon Towers sellers to extend the sale deadline of their estate has succeeded in fending off Thursday's High Court hearing.
Hotel Properties (HPL) said yesterday that it will apply to have the hearing adjourned. This came after it received official confirmation of the extension from the condominium's sale committee.

Law firm Tan, Rajah & Cheah informed HPL that the estate's new committee had extended the time for obtaining a collective sale order to Dec 11. The seven-member committee represents owners of 177 units. These are the majority owners who have signed the agreement to sell en bloc.

HPL and its two partners, the intended buyers of the Horizon Towers, are suing the sellers of the 99-year leasehold estate for an alleged breach of contract.

The sale committee, the third at the Leonie Hill estate since the saga began a few months ago, was formed last Thursday. That was when almost all who were at a meeting voted to extend the deadline to Dec 11. Sellers of 135 units - out of 177 units which signed the sale agreement - attended.

This option to extend by four months was part of the original sale agreement. The owners also agreed to do everything 'reasonably necessary' to effect the sale.

Those owners who organised the meeting were believed to have stated in a circular that absent owners were deemed to have agreed with the majority decision made at the meeting.

All eyes will now be on another legal front - Friday's High Court hearing over the sellers' appeal to quash the Strata Titles Board (STB) ruling last month that aborted the collective sale deal.

STB dismissed the Horizon Towers case over a procedural error and not over any arguments put up by a group of owners opposed to the sale. That deal lapsed as the sellers did not extend the Aug 11 deadline.

Last Friday, the HPL-led consortium filed an affidavit asking that it be allowed to participate in Friday's appeal, claiming that the issues would be more effectively adjudicated with its involvement. A decision will be made on Friday.

If the appeal succeeds, the case could go back to the STB. But a negative verdict could end the Horizon Towers deal once and for all.

If it goes back to the STB, the minority owners who object to the sale will resurface issues such as the contract's apparently low price and the unusual fact that the commission for the estate's marketing agent will be paid by the buyers, not the sellers.

HPL said earlier that it will drop its lawsuit if a collective sale order is obtained. Its group wants Horizon Towers for $500 million, the price inked in February.

 

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Sep 25, 2007
Punish condo raiders who deceive
IT WAS indeed timely that the Government introduced new laws on en bloc sales. However, it is disappointing that the percentage of approval before an en bloc sale can go through was not increased to 85 per cent for properties above 20 years old and 95 per cent for those below 10.
The law also did not provide for punishment of persons in the sales committee who falsely induce owners to sign up by claiming they have a developer buyer offering a fantastic price. This was what happened to my friend who lives in the east. Such an unscrupulous practice by condo raiders must not be condoned.

William Tay Kay Chiak

 

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Sep 28, 2007
Hearing for Horizon Towers lawsuit adjourned
By Tan Hui Yee
THE lawsuit against the owners of Horizon Towers has been put on the backburner for now, after they extended the deadline for the estate's collective sale.
The consortium behind the suit, led by developer Hotel Properties (HPL), had the High Court hearing adjourned yesterday.

Its move followed a decision by the owners last week to extend the sale deadline until Dec 11 - a move that has taken some of the heat out of the stand-off, although another legal challenge looms today based on the initial sale process.

The consortium - comprising HPL, Morgan Stanley Real Estate-managed funds and Qatar Investment Authority - signed a deal in February to buy the 99-year leasehold Leonie Hill estate for $500 million. But some owners complained that the price was too low, and their mounting opposition culminated in the Strata Titles Board (STB) throwing out the sale deal, albeit over procedural errors, on Aug 3.

That decision comes under scrutiny today, with the owners asking the High Court to overturn the STB ruling.

The consortium has also filed an affidavit asking that it be allowed to participate in the appeal hearing.

If the appeal succeeds, the STB might have to reassess the Horizon Towers deal. If the STB's original decision is allowed to stand, it could spell the end of the sale.

The stakes are high. The HPL-led group, represented by law firm Allen & Gledhill, claims that the owners of 177 units who backed the deal have breached the sale contract. It has sued the sellers for $800 million to $1 billion in lost profits arising from the alleged breach. This means that if a sale is not eventually completed - under the original terms - the owners of each unit would have to cough up more than $5 million.

The consortium had indicated that it would drop the case once the sale goes through at the $500 million price. The deadline extension has raised hopes that this might be achieved as it would allow any errors to be corrected and a fresh application to be filed.

 

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Legal exchange rivets gallery

Majority owners of Horizon Towers get their day in court

Thursday • October 4, 2007

Loh Chee Kong
cheekong@mediacorp.com.sg

IN CONTRAST to the thunder and fury of the past few days, the legal dispute surrounding the botched Horizon Towers en bloc sale ended on a muted note yesterday — less than 45 minutes after it started in the High Court.

Nevertheless, it was a day the packed courtroom — comprising mainly the condo's residents — relished, going by their obvious delight when Senior Counsel K Shanmugam, who represents the prospective buyers, was repeatedly denied the chance to address the court.

The majority owners are appealing against the Strata Titles Board's decision to abort the proposed $500-million deal on technical irregularities — three pages containing the signatures of three majority owners were missing from the documents.

Yesterday, the majority owners' lawyer, Senior Counsel Chelva Rajah, was finally given the chance to respond to points raised by the lawyers for the minority owners, who hope to sink the deal for good.

But before the hearing began, Mr Shanmugam asked Justice Choo Han Teck for permission to speak after Mr Rajah. Justice Choo's response that he would decide after listening to Mr Rajah drew cheers from the gallery.

Mr Rajah reiterated that the sale order application was "not invalid", since two of the missing pages were actually tendered to the STB in a separate bundle, while the third page was submitted before the board's hearing ended.

While lawyers for the minority owners had argued that the latest changes to the law for en bloc sales, which empower the STB to disregard technical or procedural irregularities, meant it lacked this authority previously, Mr Rajah argued otherwise.

He said: "The fact that Parliament is putting up the Bill doesn't mean it had a change of mind. It's far more likely that Parliament all along intended the board to have the power."

In his written submission, he said that even without the three signatures, the consent level for the sale was 82.51 per cent — above the required 80 per cent.

As soon as Mr Rajah was done, Mr Shanmugam, who is also a Member of Parliament, requested to take the judge through parliamentary reports to show that the legislative amendments "in fact show Parliament's true intentions". He also wanted to highlight an earlier court case to illustrate the STB's jurisdiction to amend applications.

But Senior Counsel Michael Hwang, who was representing a minority owner, objected to this "second bite of the cherry". If the judge allowed Mr Shanmugam's request, said Mr Hwang, the other lawyers had to be given the chance to respond as well.

Justice Choo gave them the choice of either "five minutes" each to address the court again or to respond in writing to a written submission of Mr Shanmugam's additional points.

While Mr Shanmugam wanted the first option, Mr Hwang chose the second and the other four lawyers present agreed with him. The judge went with the majority and gasps of "yes" were heard from the gallery.

Justice Choo is expected to give his ruling next week.

 

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Omission may be punishable

Lawyer calls error of missing pages a 'serious breach'

Wednesday • October 3, 2007

Ansley Ng
ansley@mediacorp.com.sg

TO SENIOR Counsel K Shanmugam, who represents the prospective buyer in the botched $500-million en bloc sale of Horizon Towers, it was simply a matter of picking up where the deal fell apart due to a technicality.

But to his opponent, the technicality was in fact a "false declaration" and a "crime" that might have attracted civil penalties like a fine or even a jail term.

The sale committee of the 210-unit condominium had taken the minority owners to court in an appeal against a Strata Titles Board (STB) ruling that scuttled the en bloc sale, after the board found three pages missing from the sale order application in August.

The missing pages thwarted the deal and sparked off a separate lawsuit from Horizon Partners Private Limited (HPPL) — the consortium buying the development — against the majority owners for failing to file a proper application.

Wrapping up his submission in court yesterday, in the case between the sale committee and minority owners, Mr Shanmugam said one way of solving the problem was to amend the mistakes in the filing procedure and continue where the parties left off.

"Our interest is to see the sale through and we've publicly stated we have no interest of claiming damages," he said.

Representing four minority owners, Senior Counsel K S Rajah called the omission of the pages a "serious breach" and a "false" declaration to a statutory board, where perpetrators could be investigated by the Attorney-General's Chambers.

The civil penalties for a false statutory declaration include imprisonment and/or a fine, he added.

Describing how HPPL was "holding a gun" to the heads of owners by taking them to court, Mr Rajah said his clients, in turn, could have reported the false declaration. "Then we, too, would have a gun to their heads," he said.

Senior Counsel Michael Hwang, representing one minority owner, told Justice Choo Han Teck that the court had allowed intervention by Mr Shanmugam to help it decide whether or not the STB had erred in its ruling.

Instead, Mr Shanmugam "overstayed his welcome" by submitting a "shopping list" of what he wants the court to direct, said Mr Hwang.

Similar submissions were made by Mr Ramesh Kannan, who represents three minority owners, on why the STB decision should not be overturned.

The hearing continues today with Senior Counsel Chelva Rajah — acting for the majority owners — rebutting points brought up by the lawyers representing minority owners.

 

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Oct 3, 2007
Minority owners make their case for Horizon Towers
By Fiona Chan
HORIZON Towers minority owners said yesterday that the Strata Titles Board (STB) was right to throw out the estate's collective sale application over a paperwork glitch.
Mr Ramesh Kannan, who is representing some minority owners, told the High Court that rules should be followed particularly strictly, because they involved compulsory acquisitions of assets.

'The approach must be strict compliance...when it comes to the forced acquisition of people's homes,' said Mr Kannan, adding that the STB had consistently advocated strict compliance in previous cases. The sellers argued on Monday that the glitch - three missing pages - was a technicality that STB could overlook.

They want the court to reverse the STB's August decision to abort the deal. This would allow the $500 million sale to a group headed by Hotel Properties to go ahead.

But Mr Kannan and Senior Counsel K.S. Rajah, who is representing another group of minority owners, argued that the STB had no powers to disregard the missing pages.

Mr Kannan also noted that upcoming changes in legislation will give the STB the power to ignore technical irregularities, as long as no owner's interest is prejudiced.

The introduction of this rule proves that Parliament recognises that the STB now has no such powers, he said.

Mr Kannan, Mr Rajah and Senior Counsel Michael Hwang are acting for different groups of minority owners but all argue that the STB's decision be upheld.

But while the floor was largely given over to the minority owners' lawyers yesterday, Senior Counsel K.Shanmugam - acting for Horizon Towers buyers - made a brief appearance.

He told Justice Choo Han Teck that his clients' only interest was to see the sale through. If this happens, the buyers will withdraw their suit against the sellers for breach of contract, without claiming costs, he said. The buyers are claiming up to $1 billion in lost profits.

'We are not in the business of suing,' he added, to sneers from the public gallery, where about 40 residents of Horizon Towers were sitting.

The hearing ends today, with the sellers' lawyer responding to yesterday's arguments. A decision is expected from Justice Choo in about a week's time.

 

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Oct 3, 2007
Big developers lose bidding for prime Kovan plot
By Fiona Chan
BIG gun property developers who lined up for a prime residential site in the Kovan area were pipped in the bidding by a firm hardly anyone has heard of.
Duke Development placed the top bid of $290 million for the 190,000 sq ft site in Simon Road, trumping high-profile rivals Far East Organization, Hong Leong Holdings, Frasers Centrepoint and Allgreen Properties.

Duke is believed to be a group of private investors with a pair of top dealers as shareholders.

A company search turned up Mr Han Seng Juan and Mr David Loh as Duke shareholders. They are former executive directors at UOB Kay Hian, the brokerage arm of United Overseas Bank.

Both Mr Han and Mr Loh, who are believed to be related, also hold shares in Cybertech Communications and Healthstats International, among other companies.

Their winning bid works out to about $437 per sq ft (psf) per plot ratio, and is a 'reasonable bid', said ** Richard Ellis Research executive director Li Hiaw Ho.

Mr Li believes this offer can break even at about $800 psf for the finished condominium units, which are likely to sell at between $850 psf and $950 psf.

Nearby Kovan Melody has sold out all 778 units, a testament to the strong demand for homes in the area. The units are now being resold in the secondary market for more than $800 psf, said Mr Li.

He added that part of the area's attraction are the good schools in the vicinity, such as Rosyth School and Maris Stella High School.

A condominium with about 555 units can be built on the Simon Road site, which has a maximum gross floor area of 664,337 sq ft.

Apart from homes, the plot can also host service apartments, said the Urban Redevelopment Authority

 

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Oct 2, 2007
Property boom spreads to mass market
Suburban, HDB homes post best quarterly price growth in years
By Jessica Cheam
NEW government figures released yesterday will bring cheer to the average Singaporean homeowner.
This is because prices for so-called 'mass market' properties - comprising mainly suburban condominiums and HDB homes - have posted their best quarterly growth in years.

This has brought the prices of both public and private homes to their highest level in a decade.

The flash estimates for the third quarter, which are based on home sales in July and August, show that private home prices rose 8 per cent, while prices of HDB homes jumped 6.5 per cent for the same period.

The numbers show that the effects of Singapore's property recovery, which have been largely focused on high-end luxury apartments for the last year or so, are finally filtering down to the typical homeowner.

Most significantly, prices of non-landed private homes outside the central region - in areas such as Clementi and Bedok - surged 8.1 per cent, almost on par with the increase of 8.3 per cent for homes in the core, or central, area.

Growth in prices of homes located in prime areas like districts 9, 10, 11, downtown and Sentosa have far outstripped that of suburban homes since 2004, the earliest period for which price changes in different districts are available. But the gap in price increases has now narrowed to just 0.2 percentage points.

Property analysts say the figures show a confident local market generally unshaken by the recent volatility in the stock market - due to the sub-prime mortgage crisis in the US.

Savills Singapore's director of marketing and business development Ku Swee Yong said future growth is now likely to be fuelled 'from the bottom up' by mass market homes.

CBRE Research's executive director Li Hiaw Ho also marked this quarter as a 'big step' for suburban projects, which were launched at $850 to $1,000 psf.

Suburban projects were usually defined as those costing around $600 psf - but projects like The Parc Condominium in West Coast, for example, fully sold all 659 units in August at a median price of $880 psf, said Mr Li.

Meanwhile, HDB home prices are also driving the mass market recovery. The 6.5 per cent jump in prices is the highest since 1999, and comes on the back of a 3 per cent rise in the last quarter.

'HDB home prices have languished in the doldrums for many years so it's heartening for homeowners to see them pick up pace now,' said property firm Propnex's chief executive Mohamed Ismail.

The bullish figures have prompted some analysts to revise their forecasts. Property experts say private home prices have increased 21.1 per cent so far this year, already surpassing their forecasts of between 20 and 25 per cent.

Knight Frank's director of research and consultancy Nicholas Mak gave a revised forecast of between 23 and 32 per cent.

As for HDB homes, Mr Mohamed expects the HDB price index to rise 15 per cent for the whole year.

Last year, in comparison, HDB's price index only rose 2 per cent for the whole year, while for private homes, it was about 10 per cent.

The Government also highlighted that about 43,000 new private homes are expected to be completed from now till 2010, and almost half are still unsold.

Separately, the HDB also said it plans to launch up to 6,000 new homes in the next six months, subject to market demand.

The Urban Redevelopment Authority and HDB's official third-quarter statistics will be released at the end of this month.

 

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Oct 2, 2007
Govt to boost supply of homes
Observers view supply increase as a signal to calm market amid high property prices
By Fiona Chan
THE Government has sent its strongest signal yet that it plans to increase the supply of homes and residential sites - a move that comes amid soaring real estate prices.
It will offer 6,000 new Housing Board flats over the next six months and might release more land for private homes next year if necessary.

The initiative comes as lower-end homes see a price spurt that is finally starting to match that in luxury homes.

Property consultants said the increased supply is the latest Government move to calm the market.

'The Government is seeing a very strong take-up for homes, and it wants to avoid panic buying,' said Mr Nicholas Mak, the director of research and consultancy at Knight Frank. 'So it's just telling potential buyers there is a lot of supply out there.'

Prices of entry-level private homes in suburban areas were 8.1 per cent higher in July to September than in the previous three months. The pace about matched that set by more expensive homes in the central region, going by initial estimates out yesterday.

In the same period, prices of HDB resale flats jumped by 6.5 per cent. This is double the 3 per cent rise in the previous quarter and is by far the biggest quarterly jump since 1999.

Given the recent 'good response for new flats', HDB will release a slew of new units in the coming months. Of these, 4,500 will come under the Build-to-Order (BTO) system. Another 1,500 units will be in three new Design, Build and Sell Scheme (DBSS) sites in central and eastern Singapore.

So far this year, HDB has released 2,700 BTO flats - about the same number as for the whole of last year. In the same period, it has sold a DBSS site at Boon Keng and launched another at Ang Mo Kio. The two combined can host at least 1,100 units.

HDB also said it 'will continue to monitor the market situation closely, to ensure that there is an adequate and affordable supply of flats'.

A similar reassurance was issued by the Urban Redevelopment Authority (URA) with respect to private homes. It reiterated that it 'will continue to monitor prices closely'.

In an unusual move, the agency added that it is reviewing the Government Land Sales scheme, launched every six months, for the first half of next year. It said it 'will make available more sites...if the demand continues to remain strong'.

Experts interpreted this to mean that the URA intends to put out more sites for private home development, especially under its confirmed list.

The confirmed list system offers sites for sale outright, while the other option - the reserve list - follows a more cautious approach. Reserve sites are put out only when a developer submits a minimum acceptable bid.

While consultants believe the new HDB flats can be absorbed easily, some question the need for more land for private homes.

'I don't think there would be a glut on the HDB side,' said Knight Frank's Mr Mak. 'If there is any risk of oversupply, it would be with private homes, three to four years from now.'

He noted the record run in collective sales in the past two years. Even if developers can sell all the new homes on these sites, those buying to rent out might not be able to find enough tenants when all the homes are finished.

This could bring rents and prices down, said Mr Mak. But for this year, he expects a record take-up of 15,000 new homes, compared with 11,000 last year and 7,500 in an average year.

On the other hand, collective sales will remove about 9,000 homes from the market, said Mr Ku Swee Yong, the director of marketing and business development at Savills Singapore.

'If job growth continues to be strong, absorption may not be the problem; actually, there may not be enough to go around,' he said.

The URA also removed a hotel site in Balestier from its land sales list yesterday. The 0.86ha site has been on the reserve list for a year or so, but the URA is reviewing its land use together with that of other vacant plots nearby.

 

[jq75]

Oct 2, 2007
4-year-old case dragged up in Horizon Towers saga
Dragon Court case cited to persuade judge to overturn the STB decision
By Fiona Chan
THE tangled Horizon Towers case has become even more complex as a controversial collective sale four years ago was dragged into the proceedings.
In their High Court appeal yesterday, lawyers for the majority sellers of Horizon Towers cited the case of Dragon Court, where a lone owner fought against the estate being sold en bloc in 2003.

They argued that the Dragon Court ruling sheds some light on the ongoing legal tussle over the Leonie Hill estate, as it is also related to an issue of missing disclosure.

In the Horizon Towers case, the Strata Titles Board (STB) dismissed the owners' application for a collective sale in August over a technicality: Pages bearing three consenting owners' signatures were missing from the submitted application.

The majority owners want the High Court to overturn the STB dismissal.

Their lawyer - Tan, Rajah and Cheah's Mr Chelva Rajah - said the STB knew those three owners signed the sale deal, and that the Board had the power to amend the application to include the missing pages.

Mr Rajah argued that even without those three signatures, the rest of the owners who had consented to the sale still held 82.51 per cent of share values - comfortably above the 80 per cent minimum requirement.

Mr Rajah also told the court that the missing pages were a 'clerical error'.

He then cited the High Court's ruling that upheld the STB's decision to allow the Dragon Court sale in 2003, despite more 'material' information not being disclosed in the application.

Dragon Court unit owner Koh Gek Hwa tried to block the sale, arguing that a conflict of interest between the majority sellers and the buyer had not been highlighted. Nine of the estate's 14 units were owned by a single company linked to the condominium's buyer, she said.

But the STB, noting that there was only one bidder for that sale, decided there was no reason to suggest that the buyer was unfairly chosen. The High Court backed that ruling, saying the STB had known of the seller-buyer relationship prior to its decision.

Yesterday's Horizon Towers hearing was somewhat quieter than Friday's lively session, when comments from the public gallery peppered the lawyers' speeches. The room, though, remained packed, with more than 20 lawyers from six firms and at least 40 people in the public gallery.

Justice Choo Han Teck kicked off proceedings by deciding to allow the estate's buyers to participate, ending a row that had taken up the whole of last Friday.

The buyers - led by Hotel Properties and represented by Allen & Gledhill's Mr K. Shanmugam - had asked to join the proceedings in order to protect their own interests. They have said that they will sue the majority owners for breach of contract if the $500 million sale does not go through.

Their request for inclusion, however, proved unpopular with the condominium's majority sellers.

Justice Choo said yesterday he would allow the buyers' participation as they were pursuing their commercial interests. He said it will not be 'unjust or inconvenient to hear two more voices', as long as he can 'mute' them if they prove disruptive.

Things heated up in the afternoon, when Mr Shanmugam took the court through a long retelling of the Horizon Towers saga.

 

[jq75]

Oct 6, 2007
Why stamp duty on property may be raised
I REFER to Mr Ng Zhong Ren's letter, 'Why did Iras up property valuation one year later?' (ST, Sept 29).
Mr Ng asked why Iras' letter of June 18 was received by his lawyer only on July 17. Iras had, since October last year, been corresponding with the law firm that acted for him in the property transaction. Our letter of June 18 was thus sent to this same law firm. Iras was subsequently informed by another law firm that it had taken over the case and that it had received the said letter on July 17. We have since contacted Mr Ng and have followed up with him separately on this matter.

Property buyers are required to pay stamp duty based on the transacted price of the property or its market value, whichever is higher. Where Iras has assessed that the property value declared for stamping purposes is below the market value, it will determine the stamp duty based on market value at the date of the property transaction and recover the additional stamp duty from the buyer. The market value of the property is determined based on sales evidence of similar properties.

A property transaction may be selected for stamp-duty audit within six years from the date of transaction. The property buyer or his appointed lawyer will be required to submit relevant documents, such as the sales agreement, for verification and stamp-duty assessment. Mr Ng's case was picked for adjudication as the property value declared for stamping was below the market.

Any objection by the property buyer on the valuation determined by Iras must be substantiated with supporting documents. Notwithstanding the objection, stamp duty has to be paid promptly in order to avoid any late-payment penalties.

Chin Li Fen (Ms)
Assistant Commissioner
Corporate Services Division
Inland Revenue Authority of Singapore

 

[jq75]

Oct 4, 2007
New en bloc rules kick in today
Changes meant to make sale process more regulated and transparent
By Fiona Chan
NEW collective sale regulations will kick in today - a few weeks earlier than many in the industry had expected.
The rules, which were passed in Parliament two weeks ago, were expected to take effect this month, but a date had not been specified.

The much-anticipated announcement, which came yesterday, took some en bloc players by surprise.

'We thought it was going to be later, and expected the Government to give more lead notice as well,' said Mr Jeremy Lake, executive director of investment properties at property firm ** Richard Ellis (CBRE).

He added that 'initial indications were that they were likely to kick in only at the end of the month'.

The changes are aimed at making the sale process more regulated and transparent.

They require more conditions to be fulfilled, such as adhering to stricter requirements on setting up a sales committee and providing a five-day cooling-off period for owners to change their minds after signing the collective sale agreement.

The changes will apply to all developments that, as of today, have not obtained consent from enough owners to go en bloc - 80 per cent of owners by share value, or 90 per cent for estates less than 10 years old.

It will be back to the drawing board for the owners of these developments, who will have to start the collective sale process all over again and do so by the new rules.

Most property firms said they each had 'two or three' en-bloc estates that will be affected by today's changes.

But CBRE's Mr Lake expressed relief that there was clarity on when the rules would finally kick in.

Indeed, for the last few weeks, a few projects had been suspended because no one knew when the changes would take effect, said Mr Tan Hong Boon, executive director of Credo Real Estate.

'Most lawyers were also not prepared to quote their fees for new en-bloc projects because they didn't know how much more work they would have to do under the new rules,' added Mr Tan.

Some consultants scrambled last night to get the last one or two signatures.

Mr Steven Ming, director of investment sales at Savills Singapore, said he had expected to have 'one or two more weeks to get the last few signatures'.

'I guess I will have to work overnight,' he joked.

Other consultants, such as Jones Lang LaSalle's head of investments, Mr Lui Seng Fatt, said they have been advising would-be en-bloc sellers to follow the new rules since last month.

'Fortunately, none will have to start all over again,' he said.

fiochan@sph.com.sg



--------------------------------------------------------------------------------


CAUGHT BY SURPRISE

'We thought it was going to be later and expected the Government to give more lead notice as well.'

MR JEREMY LAKE, executive director of investment properties at property firm ** Richard Ellis, on the announcement that new collective sale regulations will take effect from today

 

[jq75]

Oct 4, 2007
Land authority's sales soar to nine-year high
It chalks up sales revenue of $6.3b on the back of red-hot property market; rental income rises a third
By Tan Hui Yee
THE booming property market sent sales revenue at the Singapore Land Authority (SLA) to a nine-year high of $6.3 billion.
Its bumper result was still well shy of the record return achieved in the 1997 financial year, when the red-hot market pushed sales revenue to $14 billion.

The SLA manages state properties and also sells them to private companies and other government agencies at market value.

Its annual report out yesterday showed that it sold $3.55 billion worth of land to the private sector in the 12 months ended March 31 - about 8 per cent higher than in the previous year.

Some of this land included plots in Lim Chu Kang, which the SLA specially designated for agricultural and entertainment use.

A further $2.75 billion came from land sold to other government agencies, such as the 21ha plot for the Marina Bay integrated resort. This was bought by the Singapore Tourism Board for $1.2 billion and later taken over by developer Las Vegas Sands.

Rental revenue grew 33 per cent to $514 million, bolstered by takings from the booming Tanglin Village food and beverage cluster and the lease of the former Pearl's Hill Primary School, which is being turned into a boutique hotel.

Tanglin Village, in the Dempsey Hill area, is a thriving development of upmarket restaurants, bars and other businesses that have sprouted on the refurbished former military buildings managed by the SLA.

The authority helped to make the cluster more appealing by adding entrance and building markers, as well as creating an outdoor space for events.

Another state property adapted for new purposes is the former Changi Hospital, which the SLA tendered for use as a spa and resort development. The 7,900 sq m property is undergoing a $20 million makeover.

The authority's recent business-friendly moves have been noticed by property consultants such as Mr Ku Swee Yong.

The director of marketing and business development at Savills Singapore suggested that the SLA could try extending the leases of its rental properties so that businesses would be more inclined to sink money into refurbishing state real estate.

Many of the SLA's properties are rented on three-year leases, which can be renewed up to nine years, but this may not be enough for a business to make a profit from its investment, said Mr Ku.

The SLA's operating surplus grew by 35 per cent to $17.1 million.

Meanwhile, another state agency, the Urban Redevelopment Authority (URA), collected $2.7 billion from land sales in the financial year ended March 31.

Although the URA sold 16 sites in that period, compared with nine the year before, sales revenue dropped by 5 per cent because last year's takings were bolstered by high-value sites such as the business and financial centre in Marina Bay and the commercial plot at Orchard Turn.

The URA's operating surplus more than tripled to $14.8 million, helped by higher agency fees from selling sites and income from processing more applications for development.

 

[jq75]

Oct 4, 2007
Hostile end to Horizon Towers hearing
By Fiona Chan
TENSIONS ran high at the already prickly Horizon Towers hearing yesterday, as lawyers fought over who would have the last word.
The heated exchanges lasted less than an hour but they were more hostile than any of the previous day-long sessions since last Friday.

They brought to a close the appeal over the estate's bungled collective sale - an appeal peppered by barbed comments between highly paid lawyers and regular jeers and boos from the public gallery.

The only lawyer scheduled to speak yesterday was Senior Counsel Chelva Rajah of Tan, Rajah and Cheah. He represents the condominium's majority owners, who have asked the High Court to overturn the Strata Titles Board's (STB's) dismissal of their collective sale application in August.

Mr Rajah was to reply to arguments made by the minority owners' lawyers on Tuesday. The minority owners want the STB decision upheld.

But even before he could speak, Senior Counsel K.Shanmugam - representing the Horizon Towers buyers - attempted to have the final say. He asked Justice Choo Han Teck for '10 to 15 minutes' after Mr Rajah's speech to address some of the 'new' points raised on Tuesday.

Barely had Mr Shanmugam finished his request when Senior Counsel Michael Hwang and Senior Counsel K.S. Rajah, who each represent a different group of minority owners, were on their feet to object.

Although Justice Choo stayed the conflict by asking Mr Chelva Rajah to proceed with his remarks, Mr Shanmugam rose again once Mr Rajah was finished.

His plea to be allowed a response was interrupted by Mr Hwang, who said it would be 'unfair' to allow Mr Shanmugam 'a second bite of the cherry when he should have said all this in the first place'.

Justice Choo proposed two peace options: either Mr Shanmugam got five minutes to speak, or all the lawyers were to read his new points and respond in writing within the day.

Mr Hwang opted for the second option almost at the same time that Mr Shanmugam chose the first. It all looked quite comic to the tittering public gallery but the tension in the courtroom remained high, prompting Justice Choo to close the session without allowing Mr Shanmugam's speech.

In the end, only Mr Rajah had a say yesterday. He noted that Parliament will soon formally give the STB powers to ignore technical flaws - such as the three missing pages in Horizon Towers' collective sale application - showing that the STB was always intended to have these powers.

 

[enblockvictim]

Rise in land development charge will allow fair sharing of property gains
22 July 2007 2106 hrs

"National Development Minister Mah Bow Tan says the aim is to facilitate a fair sharing of the enhancement in the value of the land."

Clearly seen: MBT has exempted the rich... why the oversight?

Details of SG's untapped (secret) $2.03B uncollected gov tax revenue…:
http://moral-property.blogspot.com/2007/09/s203b-pa-naughty-business.html