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”.
Have you considered that, without conservation status, these unique buildings could very well suffer the fate of "compulsory acquisition" and not the windfall of an "en bloc", as everyone dreams of? These are, afterall, low-rise buildings in a very central location. I'm sure the Government can think of much better ways to "enhance" the usage of the valuable piece of land these beautiful buildings sit on.
In the event of a compulsory acquisition, you would never see this kind of valuation given to your home by the Government. And most certainly, since it is treated as a "privatised" property, there would not be an option offered to the unlucky homeowner of a Government-subsidized flat in exchange.
Besides, with the possibility of an "en bloc", you'd run the risk of losing yet another historical architecture representative of an era of this country.
Btw, I make these comments from the perspective of a homeowner of a unit in this area. I would rather have the opportunity to live in a unique property, in a neighbourhood where people are friendly and amenities are at hand, than to have a bundle of cash sit in the bank account and not have a roof over my head (what with the way the property market has been running ahead lately, one could very well end up without a roof over one's head after a successful en bloc sale!).
I am also a homeowner here at Tiong Bahru and I do not care about making a windfall from the En-Bloc frenzy. Some things are basically priceless and I just love the uniqueness of the Tiong Bahru Estate.
In case you think I am merely infatuated with Tiong Bahru because I am a real estate agent who just moved in not too long ago, this is not the case.
Tiong Bahru is the place where I spent my childhood and I have many fond memories of this place.
My wife’s family has been living here for the past 40 years and both of us studied at Tiong Bahru Primary School.
Tearing down this place is unthinkable to the both of us as well as to our extended family members who are living within the estate as well.
If you have the opportunity to read the initial part of my blog, you would have noticed my disdain for the mindless en-bloc activities that are on-going in the rest of Singapore.
I am still hoping that the Government will conserve the post war section as well. These pre and post war section of Tiong Bahru are inseparable and no one should attempt to cut off the post section just because the land is valuable.
In fact, the reason I starting blogging about Tiong Bahru Estate was because I hope to get more people acquainted with Tiong Bahru rather than just viewing it as just another piece of real estate.
And the issues I raised here are real questions I had been asked over and over again by many potential buyers.
My take is this, if nothing is done, less and less people would be able to buy this place as the CPF restriction will cut off a big group of buyers from owning this place.
My fear is that this place will degenerate into a slump as homeowners cannot offload the properties due to the dwindling pool of buyers. This will definitely affect the living experience within Tiong Bahru.
It was not too long ago that Tiong Bahru went through a similar situation. Many buyers could not obtain a loan and even if they do, they have to pay up within a short period of time. With so few buyers, prices naturally headed south. Owners were also not prepared to throw good money after the bad and did not make improvements to the flats. So this place ended up being rented out to workers as they were not too fussy about the place they live in.
I do not wish to turn back the clock to this phase in time again. That is the part that is best forgotten.
In fact, I think someone should inform Wikipedia to update their information as this place is no longer the place for the elderly. The fact no longer holds true anymore.
Let’s meet up one day to see how we can further improve this place.
I can be contacted at 9100-0001.
regarding your first post, I have some queries.
If scenario one happens, it can only mean that the price of the flat will depreciate over time?
As for scenerio two, would you be able to give a rough example of how much residents are required to pay (market rate) to top up the lease? Is there a formula?
I will need to find the time to check this out with the relevant authorities.
Will keep you posted.
I'm gigi here and I share the same sentiments as you for the estate I'm living in - Jalan Bahagia.
I've also set up a blog to blog about the estate and have received many questions asking about the chances of having it en-bloc etc.
I also have a fear that the place will degenerate into a slump as homeowners cannot offload the properties due to the dwindling pool of buyers... It has a 99 year lease and the HDB terrace is 35 yrs old now.
Given your experience as an agent in SG, do you think our fears are valid and what can we do as residents in the area?
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