reporter2
04-01-23, 09:15
Frustrations abound as delays in condo completions persist post-pandemic
Jan 03, 2023
WHEN Sabrina Tan bought her one-bedroom condo at then-newly launched The Tre Ver residential project in 2018, she did not think that it would take four years, two postponements, and countless frustrations before she could collect the keys to her home – and she is not alone.
Many developers are still grappling with delays brought on by the pandemic, which have, in turn, caused a pile-up in project completions. Numerous projects that were supposed to receive their temporary occupation permit (TOP) in 2022 have been delayed, with developers pushing back deadlines and buyers unable to collect their keys.
Based on data from the Urban Redevelopment Authority (URA) as at the fourth quarter of 2021, an estimated 17,276 private residential units, excluding executive condos, will be launched in 2023. The pipeline supply for 2023 – defined as projects that have obtained provisional permission or written permission – was updated to 18,234 units in URA’s latest dataset, as at Q3 2022.
ERA Realty’s head of research and consultancy Nicholas Mak believes one likely reason for this apparent increase is that developers were unable to complete their projects which were due for completion in 2022. This has rolled over to the pipeline supply in 2023.
Still, statistics from the Building and Construction Authority (BCA) show that the number of TOPs and certificates of statutory completion (CSC) issued in 2022 is almost back to pre-pandemic levels – likely meeting the average set between 2018 and 2019 of around 3,600 TOPs and CSCs issued annually.
In contrast, BCA issued an average of 3,100 TOPs and CSCs annually between 2020 and 2021. A TOP or CSC certifies that a building is deemed safe for occupation and has met BCA’s and other technical agencies’ regulatory requirements.
Mak noted that the figure in 2022 might be higher since it includes the issuance of both TOPs and CSCs. He also highlighted that smaller projects, such as boutique apartments, may not necessarily require a TOP and might instead apply directly for a CSC.
Furthermore, data from URA as at Q4 2021 showed that there is a pipeline supply of 11,247 private homes in 2022. Yet, statistics gathered from URA for the first nine months of 2022 reveal that just 5,103 private homes were completed in that period.
“This means that there is an around 50 per cent chance that any residential project that was supposed to (obtain its) TOP this year was delayed,” said Mak.
Checks by The Business Times (BT) also showed that at least six out of around 30 anticipated projects had delayed their expected TOP dates in 2022. This includes Amara Holding’s 10 Evelyn in Newton, which was slated to receive its TOP in February 2022, and Fragrance Group’s Jervois Treasures, where its TOP was originally scheduled for around March 2022. Data from URA Realis showed that both residential projects had yet to obtain their TOPs as of end-Q3 2022.
PropertyGuru country manager for Singapore Tan Tee Khoon attributes the delays to a shortage of workers and supply chain disruptions, which continue to plague the construction industry even as border restrictions lift post-pandemic.
For one, the easing of border restrictions means that some workers, who have been living in Singapore for the past two years, can now return to their home country, said Tan. It then takes time to recruit and train new workers to replace these leavers, he said.
“New waves of Covid-19 infections with new variants emerging continue to affect the availability of workers,” added Tan. Strict Covid-19 measures in China also continued to disrupt the supply chain, leading to delays in building and construction materials, he noted.
Developers that BT spoke to, such as Amara Holdings and UOL Group, cited similar reasons for delays in their projects’ development.
For UOL Group, its Potong Pasir project The Tre Ver delayed the expected TOP date from August 2022 to November 2022, and later December 2022. Another project at Silat Avenue – Avenue South Residence, developed with its consortium partners Kheng Leong Company and UOL’s subsidiary United Industrial Corporation – pushed back the expected TOP from Q2/Q3 2022 to the first half of 2023.
A spokesperson from UOL emphasised that the company has not been spared from the labour and material shortages brought about by the pandemic.
In the case of The Tre Ver, UOL said it has written to all buyers to inform them about the extension of the completion date. The letters included a link to URA’s website on relief measures for buyers, such as the reimbursement of costs – for example, rent for alternative premises or moving costs – incurred as a result of the delays.
“Our buyers are generally understanding,” added UOL.
Even so, frustrations abound among many buyers.
In some instances, they failed to receive any letters or further updates from the developers, including Sabrina Tan and several of her fellow buyers at The Tre Ver condo, who shared that communication with UOL was close to “non-existent” before the key collection process finally began in late November. This left many of them feeling like they had been left in the lurch, uncertain on whether they should extend their current rental leases or search for other short-term accommodation, such as serviced apartments or even chalets.
For Tan, the delays meant she had to move between rental accommodations twice. She eventually stayed at one of her family’s properties while waiting for her keys.
Besides the opportunity cost from renting out the investment property, Tan said the “biggest thing” for her is the surging interest rates, which translate to higher mortgage repayments, especially for private homeowners on floating-rate packages such as herself.
The goods and services tax rate hike also means it will cost more to furnish her new home, she said.
Tan added that these inconveniences, while exasperating for her, were doubly so for some of her fellow buyers, particularly families with young children.
“One of them squeezed together as a family of four or five in a small rental accommodation because they thought (the delay) is just for a short time till a certain date frame,” she said. The situation ultimately lasted for a year due to the “mishandling of communication”, she said.
A property agent shared with BT that he, too, has noticed more clients looking at the rental market for temporary accommodation while waiting for their condos to be completed. Some of these clients had to extend their rental leases at a much higher rate, as the rental market continues to heat up.
Although both Tan and the property agent sympathised with the developers, recognising that such delays are a natural consequence of the pandemic, they noted that this did not make the process any less painful for buyers.
For other buyers, such as Alex Kong, the delays have been a blessing in disguise. Kong has been waiting since September 2021 for the completion of his four-bedroom unit at Avenue South Residence.
“For my current situation, it’s still okay because I’m renting from my uncle and (the TOP delay) means I can delay the full payment by a bit,” he said.
“I’m definitely frustrated, but I can’t do anything about it or force them to be quicker. I can only focus on the bright side of things.”
https://www.businesstimes.com.sg/property/frustrations-abound-delays-condo-completions-persist-post-pandemic
Jan 03, 2023
WHEN Sabrina Tan bought her one-bedroom condo at then-newly launched The Tre Ver residential project in 2018, she did not think that it would take four years, two postponements, and countless frustrations before she could collect the keys to her home – and she is not alone.
Many developers are still grappling with delays brought on by the pandemic, which have, in turn, caused a pile-up in project completions. Numerous projects that were supposed to receive their temporary occupation permit (TOP) in 2022 have been delayed, with developers pushing back deadlines and buyers unable to collect their keys.
Based on data from the Urban Redevelopment Authority (URA) as at the fourth quarter of 2021, an estimated 17,276 private residential units, excluding executive condos, will be launched in 2023. The pipeline supply for 2023 – defined as projects that have obtained provisional permission or written permission – was updated to 18,234 units in URA’s latest dataset, as at Q3 2022.
ERA Realty’s head of research and consultancy Nicholas Mak believes one likely reason for this apparent increase is that developers were unable to complete their projects which were due for completion in 2022. This has rolled over to the pipeline supply in 2023.
Still, statistics from the Building and Construction Authority (BCA) show that the number of TOPs and certificates of statutory completion (CSC) issued in 2022 is almost back to pre-pandemic levels – likely meeting the average set between 2018 and 2019 of around 3,600 TOPs and CSCs issued annually.
In contrast, BCA issued an average of 3,100 TOPs and CSCs annually between 2020 and 2021. A TOP or CSC certifies that a building is deemed safe for occupation and has met BCA’s and other technical agencies’ regulatory requirements.
Mak noted that the figure in 2022 might be higher since it includes the issuance of both TOPs and CSCs. He also highlighted that smaller projects, such as boutique apartments, may not necessarily require a TOP and might instead apply directly for a CSC.
Furthermore, data from URA as at Q4 2021 showed that there is a pipeline supply of 11,247 private homes in 2022. Yet, statistics gathered from URA for the first nine months of 2022 reveal that just 5,103 private homes were completed in that period.
“This means that there is an around 50 per cent chance that any residential project that was supposed to (obtain its) TOP this year was delayed,” said Mak.
Checks by The Business Times (BT) also showed that at least six out of around 30 anticipated projects had delayed their expected TOP dates in 2022. This includes Amara Holding’s 10 Evelyn in Newton, which was slated to receive its TOP in February 2022, and Fragrance Group’s Jervois Treasures, where its TOP was originally scheduled for around March 2022. Data from URA Realis showed that both residential projects had yet to obtain their TOPs as of end-Q3 2022.
PropertyGuru country manager for Singapore Tan Tee Khoon attributes the delays to a shortage of workers and supply chain disruptions, which continue to plague the construction industry even as border restrictions lift post-pandemic.
For one, the easing of border restrictions means that some workers, who have been living in Singapore for the past two years, can now return to their home country, said Tan. It then takes time to recruit and train new workers to replace these leavers, he said.
“New waves of Covid-19 infections with new variants emerging continue to affect the availability of workers,” added Tan. Strict Covid-19 measures in China also continued to disrupt the supply chain, leading to delays in building and construction materials, he noted.
Developers that BT spoke to, such as Amara Holdings and UOL Group, cited similar reasons for delays in their projects’ development.
For UOL Group, its Potong Pasir project The Tre Ver delayed the expected TOP date from August 2022 to November 2022, and later December 2022. Another project at Silat Avenue – Avenue South Residence, developed with its consortium partners Kheng Leong Company and UOL’s subsidiary United Industrial Corporation – pushed back the expected TOP from Q2/Q3 2022 to the first half of 2023.
A spokesperson from UOL emphasised that the company has not been spared from the labour and material shortages brought about by the pandemic.
In the case of The Tre Ver, UOL said it has written to all buyers to inform them about the extension of the completion date. The letters included a link to URA’s website on relief measures for buyers, such as the reimbursement of costs – for example, rent for alternative premises or moving costs – incurred as a result of the delays.
“Our buyers are generally understanding,” added UOL.
Even so, frustrations abound among many buyers.
In some instances, they failed to receive any letters or further updates from the developers, including Sabrina Tan and several of her fellow buyers at The Tre Ver condo, who shared that communication with UOL was close to “non-existent” before the key collection process finally began in late November. This left many of them feeling like they had been left in the lurch, uncertain on whether they should extend their current rental leases or search for other short-term accommodation, such as serviced apartments or even chalets.
For Tan, the delays meant she had to move between rental accommodations twice. She eventually stayed at one of her family’s properties while waiting for her keys.
Besides the opportunity cost from renting out the investment property, Tan said the “biggest thing” for her is the surging interest rates, which translate to higher mortgage repayments, especially for private homeowners on floating-rate packages such as herself.
The goods and services tax rate hike also means it will cost more to furnish her new home, she said.
Tan added that these inconveniences, while exasperating for her, were doubly so for some of her fellow buyers, particularly families with young children.
“One of them squeezed together as a family of four or five in a small rental accommodation because they thought (the delay) is just for a short time till a certain date frame,” she said. The situation ultimately lasted for a year due to the “mishandling of communication”, she said.
A property agent shared with BT that he, too, has noticed more clients looking at the rental market for temporary accommodation while waiting for their condos to be completed. Some of these clients had to extend their rental leases at a much higher rate, as the rental market continues to heat up.
Although both Tan and the property agent sympathised with the developers, recognising that such delays are a natural consequence of the pandemic, they noted that this did not make the process any less painful for buyers.
For other buyers, such as Alex Kong, the delays have been a blessing in disguise. Kong has been waiting since September 2021 for the completion of his four-bedroom unit at Avenue South Residence.
“For my current situation, it’s still okay because I’m renting from my uncle and (the TOP delay) means I can delay the full payment by a bit,” he said.
“I’m definitely frustrated, but I can’t do anything about it or force them to be quicker. I can only focus on the bright side of things.”
https://www.businesstimes.com.sg/property/frustrations-abound-delays-condo-completions-persist-post-pandemic