Policy on outdoor spaces to be reviewed
Any changes in policy could affect ECs, DBSS units but not private developments: Analysts
by Sumita Sreedharan
04:45 AM Jan 08, 2013
SINGAPORE - After the sales of super-sized executive condominium units hit the headlines in recent weeks, the Government has moved in to review a policy which allows developers to sell off "free spaces to make additional profit for themselves", as National Development Minister Khaw Boon Wan put it.
Currently, developers do not have to pay a development charge for open spaces. However, developers are making money from these spaces by selling them as part of super-sized units.
Writing on his blog yesterday - the second time in less than two months he has blogged on the issue - Mr Khaw said he has directed the Urban Redevelopment Authority (URA) to "review this policy and have it fixed". Responding to TODAY's queries, a URA spokesperson said it will announce the details once the review is completed.
Analysts TODAY spoke to said the authorities could limit the area allowed for rooftop terraces and other private outdoor spaces or impose a levy on the sale of such areas. Any changes in policy would likely apply to ECs and developments under the Design, Build and Sell Scheme but not private developments, they said.
On Oct 26, a 2,716 sq ft, double-storey EC penthouse at 1 Canberra was reportedly sold for a record S$1.61 million. Less than a week later, a 2,845 sq ft penthouse at Heron Bay was sold for S$1.77m. The transactions prompted Mr Khaw to urge developers in a blog post on Nov 23 to bear in mind the "spirit of the EC policy" and the policy's intent. Most recently, a 4,349 sq ft penthouse at CityLife@Tampines was sold within two hours after its launch on Dec 29, for S$2.05 million.
Mr Khaw said: "In some recent EC launches, super-sized EC units were offered and snapped up by buyers who did not appear to be from the 'sandwiched' households. Understandably, there was public indignation at such deviations ... from what we had intended ECs to serve."
Alluding to CityLife@Tampines, Mr Khaw said he was "initially baffled" why the developer priced a penthouse at S$470 per square foot, while selling other smaller EC units at S$770 psf. "As I probed, I discovered that the developer had not short-changed itself," said Mr Khaw, pointing out that EC developers were selling off outdoor space.
He said: "What is happening at the rooftop in the form of private roof terrace is also happening on the ground floor where it is referred to as 'private enclosed space' for the buyer."
While such a practice is "not improper under current URA rules", Mr Khaw noted that as more developers do so, communal space in developments - which promote greenery and provide useful common amenities - will shrink. He added that some buyers "may be disappointed later on, when they find out that these outdoor spaces that they have paid for are not allowed to be covered up or enclosed."
Analysts said that the practice is prevalent in private residential developments, with sale-able outdoor spaces spread evenly among the units. However, in ECs, such spaces are "concentrated into a few luxurious units as the developers can only find a certain number of buyers for the units", said Chesterton Suntec international head of consultancy and research Colin Tan.
ERA Key Executive Officer Eugene Lim added that with the high land and construction costs, developers "have to explore ways to increase sale-able area in order that the project remains financially viable".
SLP International research head Nicholas Mak noted that any changes will unlikely affect ECs that are being built, as the plans "have already been approved". Referring to the Heron Bay and CityLife@Tampines projects, he said: "All the publicity has led to unintended consequences, these two have spoilt it for everyone."
- http://www.todayonline.com/Singapore/EDC130108-0000028/Policy-on-outdoor-spaces-to-be-reviewed
Any changes in policy could affect ECs, DBSS units but not private developments: Analysts
by Sumita Sreedharan
04:45 AM Jan 08, 2013
SINGAPORE - After the sales of super-sized executive condominium units hit the headlines in recent weeks, the Government has moved in to review a policy which allows developers to sell off "free spaces to make additional profit for themselves", as National Development Minister Khaw Boon Wan put it.
Currently, developers do not have to pay a development charge for open spaces. However, developers are making money from these spaces by selling them as part of super-sized units.
Writing on his blog yesterday - the second time in less than two months he has blogged on the issue - Mr Khaw said he has directed the Urban Redevelopment Authority (URA) to "review this policy and have it fixed". Responding to TODAY's queries, a URA spokesperson said it will announce the details once the review is completed.
Analysts TODAY spoke to said the authorities could limit the area allowed for rooftop terraces and other private outdoor spaces or impose a levy on the sale of such areas. Any changes in policy would likely apply to ECs and developments under the Design, Build and Sell Scheme but not private developments, they said.
On Oct 26, a 2,716 sq ft, double-storey EC penthouse at 1 Canberra was reportedly sold for a record S$1.61 million. Less than a week later, a 2,845 sq ft penthouse at Heron Bay was sold for S$1.77m. The transactions prompted Mr Khaw to urge developers in a blog post on Nov 23 to bear in mind the "spirit of the EC policy" and the policy's intent. Most recently, a 4,349 sq ft penthouse at CityLife@Tampines was sold within two hours after its launch on Dec 29, for S$2.05 million.
Mr Khaw said: "In some recent EC launches, super-sized EC units were offered and snapped up by buyers who did not appear to be from the 'sandwiched' households. Understandably, there was public indignation at such deviations ... from what we had intended ECs to serve."
Alluding to CityLife@Tampines, Mr Khaw said he was "initially baffled" why the developer priced a penthouse at S$470 per square foot, while selling other smaller EC units at S$770 psf. "As I probed, I discovered that the developer had not short-changed itself," said Mr Khaw, pointing out that EC developers were selling off outdoor space.
He said: "What is happening at the rooftop in the form of private roof terrace is also happening on the ground floor where it is referred to as 'private enclosed space' for the buyer."
While such a practice is "not improper under current URA rules", Mr Khaw noted that as more developers do so, communal space in developments - which promote greenery and provide useful common amenities - will shrink. He added that some buyers "may be disappointed later on, when they find out that these outdoor spaces that they have paid for are not allowed to be covered up or enclosed."
Analysts said that the practice is prevalent in private residential developments, with sale-able outdoor spaces spread evenly among the units. However, in ECs, such spaces are "concentrated into a few luxurious units as the developers can only find a certain number of buyers for the units", said Chesterton Suntec international head of consultancy and research Colin Tan.
ERA Key Executive Officer Eugene Lim added that with the high land and construction costs, developers "have to explore ways to increase sale-able area in order that the project remains financially viable".
SLP International research head Nicholas Mak noted that any changes will unlikely affect ECs that are being built, as the plans "have already been approved". Referring to the Heron Bay and CityLife@Tampines projects, he said: "All the publicity has led to unintended consequences, these two have spoilt it for everyone."
- http://www.todayonline.com/Singapore/EDC130108-0000028/Policy-on-outdoor-spaces-to-be-reviewed
