Sunday, February 6, 2011

For better or for worse

Straits Times: Sun, Feb 06
It is that time of the property cycle again. Mega collective sale launches worth upwards of $500 million have been making headlines.

Private property prices have hit historic highs amid a flood of foreign capital into Singapore, healthy developers' balance sheets and low interest rates.

There is no doubt Singapore's en bloc fever has returned.

Tulip Garden, for example, was reported to have a reserve price of $650 million, while Pine Grove's was a staggering $1.7 billion.

As I surveyed the property landscape this time of the year, I was overcome with a sense of deja vu. The conditions today reminded me of the property boom of 2007, in which a total of 116 collective sales generated record investment sales of $13.64 billion.

During that period, Horizon Towers in Leonie Hill sold for a record $500 million, then other projects smashed record after record: Gillman Heights sold for $548 million, Leedon Heights for $835 million and Farrer Court for $1.34 billion.

The arguments for collective sales are well known: some estates need urban rejuvenation, especially in land-scarce Singapore where gross plot ratios should be maximised to allow more homes to be built to house a growing population.

But as Singapore went through its strongest wave of collective sales in its history then, an unprecedented groundswell of dissatisfaction also rose among the residents.

There were bitter fights in court to halt the sale of Waterfront View, Gillman Heights, Horizon Towers and Tampines Court, to name just a few high-profile cases.

Some minority owners who refused to sell their homes won their cases after protracted lawsuits and hefty costs, such as at Horizon Towers and Tampines Court.

But most of the collective sales went ahead.

Amid the frenzy, there were many national debates surrounding the process and its legislation.

Many felt the law allowed for ambiguities that disadvantaged residents, especially those not willing to sell. A few MPs also voiced their concerns about whether such sales led to older properties being rejuvenated at a 'personal cost to citizens', with many residents experiencing social and spatial displacement after being forced to move.

In May last year, the Government passed new rules in Parliament to give greater clarity to the collective sale process.

Among other improvements, one key change was that after the first failed attempt at a collective sale, subsequent attempts will face more stringent requirements.

During these conversations, one underlying question that never went away was: How would the en bloc phenomenon - a symbol of Singapore's quest for progress and land efficiency - change the social fabric of society?

Will older folk be able to cope with a move to a new environment? Will it break up communities and neighbours who have built up friendships over decades? Or will it enable families to enjoy a better quality of life elsewhere?

As I thought about these questions amid our fresh en bloc boom, I decided it was time to track down some of these families whose lives were changed forever by the upheaval.

The Sunday Times decided to focus on one estate: Gillman Heights, whose sale was bitterly fought in court for more than two years.

Lawyers for the minority owners argued that the collective sale law had not been intended to cover HUDC estates. Another point of contention was the calculation of the development's age, which determines if an 80 or a 90 per cent level of consent is needed.

The Court of Appeal dismissed these points and gave the green light for the 607-unit, 99-year leasehold estate in Alexandra Road to be sold in 2009. It was a landmark case that clarified some ambiguity in the laws surrounding collective sales of former HUDC estates.

Through the interviews, I saw how some had adapted better than others to their new environment.

There were those for whom the sale cast a permanent shadow over their lives as they struggled to get used to living in a less-central location. Then there were those who managed to upgrade their homes and settle down with a higher or similar quality of life.

These are the stories of how people's lives have been changed - and their experience will tell you if the en bloc move has been for better or for worse.

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