Braddell View, the last of Singapore's 18 HUDC estates is up for privatisation, said the Ministry of National Development said on Tuesday.
Braddell View was developed in two phases on two separate land leases, with different expiry dates. To achieve a uniform expiry date, the topping up of the older land parcel to level with that of the newer one need to be sorted prior to privatisation.
A land premium must thus be paid by every flat owner in the estate with 918 flats and two shops.
Privatisation of the estate requires a voting mandate of at least 75 per cent in favour of the move, followed by a top-up premium to be determined by the Chief Valuer Office and an application by the Housing Board to the Singapore Land Authority for the top-up.
Analysts anticipate the privatisation to go through but see it as a long drawn out affair as some owners may have issues with the amount they need to pay.
Some owners may also choose to sell their units while others hold on in anticipation of a potential en bloc sale.
End of the HUDC era
National Development Minister Khaw Boon Wan blogged on Tuesday that Braddell View's designation for privatisation is the symbolic end of the HUDC era.
The first HUDC estates were built in the 1970s to help middle-income families own their homes and were well received.
By the 1980s, demand for HUDC flats had dwindled as more resale HDB flats came on stream and the Executive Flats as an alternative housing option was introduced.
Meantime, private properties had also become more affordable after a declining property cycle.
HDB stopped building HUDC altogether in 1987.
In 1995, HDB started to privatise the HUDC estates, enabling their dwellers to become private property owners.
Mr Khaw said, "Housing policies are dynamic. They evolve with changing circumstances, but the era of HUDCs has ended. However, HUDC estates will remain a testament to the creative ways in which we have housed our people and help them fulfil their dreams."
Analysts said the collective sales of large HUDC projects remain challenging in a slowing property market.
Of the 13 HUDC estates that have been legally privatised so far, only five have successfully completed the en bloc deal.
Braddell View is the last of 18 HUDC estates to be announced for privatisation which if successful will bring greater flexibility in managing the estate.
But those hoping to cash in on the en bloc market within the next few years could be disappointed.
Privatised HUDC projects like Laguna Park, Tampines Court and Eunosville have been launched for collective sale in recent years, but there have been no takers.
To date, only five have been successful.
They include the S$1.3 billion Farrer Court site where CapitaLand's d'Leedon is now situated, Amberville, Gillman Heights, Minton Rise and Waterfront View Estate.
Analysts said developers still have a strong appetite for land, looking at the number of bids from recent government land tenders but with current market conditions, they will likely prefer smaller plots, as well as the comparatively hassle-free land acquisition process under the Government Land Sales Programme.
Market watchers said larger sites with an asking price of over S$1 billion would be a tough sell, and presently, the sweet spot for en bloc transactions is probably under S$200 million.
Source: Straits Times – 28 Jan 2014