Fewer cluster homes may be built

Source : Straits Times - 5 Nov 2008

But congestion will be reduced and newer units can be bigger

Developers may soon build fewer strata-titled landed homes - also known as cluster homes - which in recent years have become increasingly popular.

The Urban Redevelopment Authority (URA) is reinstating an old rule early next year which analysts expect to leave developers less inclined to build the homes.

The main reason for the move is that developers have tended to cram as many of these homes onto a plot as possible.

This has led to congestion, and a deterioration of the environment of these developments, which are landed homes with strata titles and common facilities, URA said.

Such homes have gained in popularity in recent years as they combine the appeal of conventional landed homes with condo-style facilities such as swimming pools, playgrounds and security.

Buyers also pay slightly less for a strata landed home than conventional landed homes - which come with land titles.

But from Feb 3 next year, developers will be permitted to build fewer strata landed units in a given development than under current laws although these units may be larger.

In a circular released on Monday, the URA said it will re-introduce a cap to limit the number of allowable units in strata landed housing developments as such estates have become dense and congested.

This will be based on a minimum plot size per unit similar to that imposed for conventional landed homes.

Property consultants said the likely impact of the new rule is that developers would switch to building landed homes, since they would now be able to build fewer strata landed homes on a given plot.

The URA change means that a developer can build 66 strata terrace homes on a 10,000 sq m site, instead of 80 such units under existing rules. However, each of the 66 homes can be 20 per cent bigger in size than those built under existing rules.

As for strata semi-detached homes on the same plot, a developer can build up to 72 units under existing rules and up to 50 units that are 45 per cent bigger in size under the new guidelines.

The change is more pronounced for strata-bungalows. A developer which is currently able to build 60 units on a given plot will be able to build just 25 units under the new rule, though these units can be a whopping 2.4 times bigger.

The new rule will encourage developers to build conventional landed housing rather than strata landed homes, said Knight Frank’s director of research and consultancy, Mr Nicholas Mak.

If they choose to build strata homes, they are likely to consider only strata terrace homes as they can pack more onto the same piece of land, he said.

Indeed, Credo Real Estate’s managing director, Mr Karamjit Singh, said that strata-bungalows and strata semi-detached houses may eventually disappear.

As such houses are set to be bigger, their absolute value will go up, he said. ‘They will become less affordable.’

Currently, strata landed homes typically cost 10 to 20 per cent less than conventional landed homes, he said. But the gap will close under the new guidelines.

‘Mindsets need to be change as conventional landed homes typically command a higher price than strata landed homes. Whether a buyer is prepared to pay the same price for a strata landed home is a question mark,’ said Mr Singh.

Strata landed housing was introduced in 1993, with the same control that will be re-introduced early next year. This was lifted in 2001 - except for strata bungalows proposed within exclusive Good Class Bungalow areas - to allow the industry greater flexibility in design and to promote self-regulation, URA said.

It is reinstating the control as a focus group consultation last year found that the quality of the living environment in strata landed estates has deteriorated as houses within the strata landed development are packed very close together to maximise the number of units.

‘Landed housing residents living nearby now have to deal with heavier traffic into the estate and a more congested environment due to the large number of strata landed housing units being built,’ URA said in its circular.

Between 2003 and this year, about 100 strata landed housing projects were approved, according to its data.

URA also said it had received complaints from residents of landed housing estates of the increasingly dense environment caused by some new strata landed housing developments.

It said strata housing will still be an attractive option as there is enough flexibility for creative layouts and developers can save on land, which would be required for public parks and roads if the site was for conventional landed housing.