The Tiong Bahru Pre-War section was sold to the existing tenants around 1967 and the properties here were transacted like “PRIVATE” properties.
In 2003, it was awarded “CONSERVATION” status as these buildings have historical significance in Singapore’s history.
At the moment, the lease remaining is about 59 years and many buyers, particularly the younger ones, are affected by the CPF withdrawal limits. These rules were implemented by the Government to ensure that her citizens are able to live in the property till they are 80 years old.
The intention of our Government is primarily GOOD but these 2 events may have created a unintended barrier that prevents the place from achieving its true value.
While I am pro-conservation, I also recognized that the “Conservation Status” has effectively cut off the resident’s hope of obtaining a windfall through a collective sale exercise. There is no way they can get a developer to “reset” the lease to 99 years through a redevelopment proposal as the “conservation status” prevents that option.
So while other aging leasehold properties could negate the dwindling remaining lease through redevelopment, this place offers no such hope at the moment.
Maybe this could be the reason why many buildings that were built in the 70s are fast disappearing. The obvious and easiest way out to protect the owner’s assets is to tear it down and give it a new lease of life….not to mention a handsome profit as well. Not many will be so noble to let the lease run down and see their hard earn savings go down the drain.
Let’s explore the various possible scenarios that this place may have for the flat owners
Scenario One: No TOP UP lease
Nothing happens. Life goes on as normal. The Government is not obliged to top up the lease for these flat owners. All investment carries risk and all owners knew about the rules and regulation prior to purchasing these flats. They can still live in the flat for another 50 over years before the Government takes it back.
Scenario Two: The lease gets topped up
The lease gets topped up to 99 years again but residents are required to pay “market” rate to top up the lease. For those who are not gainfully employed or retired, the Government may allow them pay when they sell the property. They will be charged “interest” on that original “top up lease” amount.
With the lease topped up, the entire place will certainly experience a surge in prices as the buyer’s market widen and many more yuppies could afford to buy into this area.
However, this scenario has its problem as well. If the entire Singapore property market heads south after the “top up” exercise, “Negative equity” owners may have problem coming up with the “top up” money plus interest. But I am confident that our Government will be able a produce a good solution for everyone here.
Another factor to consider is that our Government CANNOT and WILL NOT be reckless in allowing the place to be topped up to 99 years without doing a thorough audit on the buildings. They must be very sure that these buildings can stand for another 100 years before allowing the topped up exercise.
The challenge here is to get all owners to co-operate and put up with the inconvenience of the building audit. After the audit, the rectification and repair exercise will definitely follow right after that. This is the part which will ruffle many feathers here as those with unauthorized renovations within their flat will probably be the most uncooperative ones.
But I guess this will be the bitter pill the residents here have to swallow before they get to enjoy the FRUIT.
Whatever the outcome may be, my sincere hope is for this place to prosper continuously and Tiong Bahru Estate can become yet another showcase to prove that “conservation” status does not always means being “shortchanged”.