Housing Affordability in Hong Kong – A Quick Comparison with Singapore

 

When the housing market restarted with a vengeance in Hong Kong after Donald Tsang stepped down , however much tight land supply policy could be justified given government revenue dependence, it should not have affected the public sector housing. People seeking public housing could not have afforded private housing and so they should not be a government revenue concern.

 

Yet, despite calls and evidence being brought to the attention of the government, public housing supply remains very low.

 

While 80% of Singaporeans live in public housing, only 44.7% of Hong Kongers do.

 

Looking at the numbers 

Average public housing price of the Housing Development Board of Singapore is S$507 per square foot., equivalent to HKD $2,930. In Hong Kong, those who could not get into public housing face an average apartment price per square foot of HK$ 16,883 per square foot (apartments under 400 square feet), or 5.76 times more expensive than Singapore.

  • Hong Kong GDP per capita – USD $46,323
  • Singapore GDP per capita – USD $59,797.

But GDP per capita is always unreliable for these purposes because of the huge income disparity and this average figure included the super-rich. Hong Kong ranks world no. 1 in income disparity and has the world’s largest Gini coefficient.

 

So, in Singapore, public housing cost as a multiple of median monthly household income = 507 / 7744 (both expressed in Singapore dollars) = 6.5%.In Hong Kong, for those who had to buy private housing instead of lining up for public housing, housing cost as a multiple to median monthly family income = HKD$16,883 / 26,500 = 63%.

  • Median monthly household income in Singapore is S$ 7744 = HKD $44,643.
  • Median monthly household income in Hong Kong is HK$ 26,500.

 

Therefore, Hong Kong private sector housing (for many who need to buy them) is 10 times less affordable than in Singapore.We have not yet dealt with the real impact by calculating the housing prices as a multiple of monthly or annual disposable income for housing payment. Which will magnify the difference and show the plight of the Hong Kong people. So, journalists who sing the mantra that Hong Kong’s riots were caused by the stripping of political freedom and has nothing to do with poverty and unaffordable housing, go back and do your maths.

 

Source: Urban Reform Institute and Frontier Centre For Public Policy

Source : hkeconomy.gov.hk

 

The Different Types of Housing you will see in the UK

As a guy who has lived in both UK and HK, I can certainly say there are quite a few differences to take note of when deciding on long-term accommodation. For those moving to the UK from Hong Kong, they may find themselves largely unfamiliar with the different types of housing spread across the UK. So, it might be worthwhile to learn about housing types in the UK to better understand the advantages and drawbacks that come with them.

 

Surprisingly there is no legal requirement for room ceilings to be at a certain height in the UK. However, the average room height in UK is 2.4 m but ideally 2.6 m to 2.7 m. On the other hand, Hong Kong has requirements that every room used or intended to be used for office or habitation should have a height no less than 2.5 m, measured from floor to height.

Detached House

The housing type that offers a greater degree amount of privacy than others, it does not share any wall with other structures. Often built in rural or suburban areas, they typically come with both back and front lawns, which may be ideal for pet owners and those who enjoy outdoor activities such barbequing or gardening. They also tend to come with garages, useful for car-owner. However, a downside with this type is that it tends to be the most expensive housing type to purchase, and comes with high maintenance and upkeep costs.

 

Semi-detached House

Slightly different from the detached house, the semi-detached house shares at least one wall with an existing structure that is separately owned. These are usually cheaper than detached houses. As you share a wall with a neighbour, there is the possibility of disputes such as noise disturbance that may arise. On that note, any building alterations done would need to be discussed with your neighbour. So, you may need to take these factors into consideration.

 

Terraced House

Found commonly in populated areas such as cities, terraced housing are houses that sits in rows that occupy the street. A popular type of housing where land is at a premium, it allows for construction to save a great deal of space. Terrace houses usually share walls on both sides, where the accommodation is ‘sandwiched’ by others. Could possibly offer a bit more security with neighbours on both sides, a bit more foot traffic surrounding the house.

 

End-of-Terrrace House

With only minor differences to terrace houses, end-of-terrace houses are found at the end of the rows of the homes. They typically occupy the corners of the street or the ends of roads. They can offer more space and better lighting than the terrace houses in the middle due to the extension sideways. They can cost around 20% more than normal terraced homes.

 

Flats 

Usually being the smallest type of housing, flats are more affordable compared to the rest of this list. Usually stacked into a single building, similar to Hong Kong, flats are popular in inner city areas due to the space saving advantage. They also usually offer security and concierge that takes care of the building. Depending on the firm that manages the building, the apartment complex may also come with amenities such communal swimming pool and/or gym, clubhouses with reading room or study spaces.

 

Inside the houses of UK

 

If you’re interested in what the interior of these houses looks like, take a look at the videos on this YouTube channel.

The future of the housing stock left behind by the Tokyo Olympic Village

Olympic Villages have accompanied Olympic Games since the Olympics in Los Angeles, 1932. The Village designed for the Helsinki Games in 1952 was the first intended to be converted into housing. Now, following Helsinki’s example, Olympic Villages are often converted into residential units, with rare anomalies such as Lake Placid 1980, which now stands as a federal prison. However, the success of each Village in their subsequent uses still vary immensely, depending on many interconnected factors such as sustainability and economic growth.

The Tokyo 2020 Olympics Village is set to be converted into a 13.9 hectare residential sub-division, ‘Harumi Flag’, by ten large developers, including prominent companies like Nomura Real Estate and Mitusi Fudosan Residential. Plans anticipate that the development, located in the centre of Tokyo on man-made island Harumi, would consist of over 23 residential buildings and a commercial facility, as well as other leisure and social services, such as parks and childcare facilities. 

Source: https://news.panasonic.com/global/stories/2019/71599.html

Whether or not these flats remain vacant in 2024, which is when the flats are set to be completed, cannot be determined for sure at this point. Despite this, after taking a look at the Sydney (2000), Athens (2004), Beijing (2008), London (2012) and Rio de Janeiro (2016) Olympic Villages it can be seen that there are a few common criteria that distinguish the successes from the failures. These include the economic state of the host country, whether private or public developers are in charge, how much emphasis is placed on sustainability and the amount of careful planning involved. The location of said Villages can also be taken into account, however this point may be secondary to the rest as it can be argued that with good planning and a decent transport system, such as will be seen in the case of London, distance from the city centre is not as significant a factor. When the pattern that successful Olympic Villages have followed is identified and compared with the journey of the Tokyo Olympic Village so far according to the criteria listed above, the future of the Village seems optimistic.

 

Past Olympic Villages

Sydney (2000)

The Sydney Olympic Village was a remarkable success. Built in Newington (inner-west Sydney) and developed by a public-private partnership, it was a major stepping stone in terms of sustainability, and reportedly ‘changed urban planning and design in Australia forever’, in particular the development of greenfield sites. Unlike previous Villages, it was designed as permanent housing, and ‘used the principles of permanent dwellings that had game overlays to deliver the beds required for athletes’. For example, demountables that could be easily removed were placed in backyards and removed after the Games.

Source: https://www.projectanalysis.com.au/olympic-athletes-village-demountable/2923

Rooms were also big enough for divisions to be placed inside. This meant that their target market – Sydney’s middle class , or even the general public, would be more willing to put their money forward and purchase housing as these residences were built more like a permanent home to live in rather than for a two-week temporary stay. 

Source: https://placesjournal.org/assets/legacy/media/slideshows/gade-olympic-villages-18.jpg

Furthermore, the emphasis placed on sustainability during its construction, with the area being the largest solar-powered suburb in the world, boosted the its status and bolstered its image, adding onto the pre-existing attraction of it being a former athlete’s village. Another factor that contributed to its success was the  real estate boom and overall favourable growth in the economy at the time, which eliminated the risk of being unable to finance construction due to sudden large falls in consumer confidence and subsequently consumption. It meant that consumers were more eager to purchase new housing and so demand was able to meet supply more easily. 

 

Athens (2004)

The Athens Olympic Village (2004) was to be turned into the ‘biggest social housing development in Greek history’ and was constructed on brownfield (‘degraded, polluted, minimally inhabited wasteland on the city’s far northern outskirts) land. It was a huge failure, with many flats now vacant and the infrastructure dilapidated. Its use as public housing, distributed to citizens through a lottery, diverged from the Olympic Village in Sydney, which was built to be sold as housing for those in the middle-class. Another aspect that differed from the successful Sydney Olympic Village was that it was built using ‘old, environmentally unfriendly technology’. Furthermore, even as the athletes were moving into the village, there was already criticism surrounding the living conditions, with some citing bad security and the housing being unfinished. 

source:https://placesjournal.org/assets/legacy/media/slideshows/gade-olympic-villages-19.jpg

One core reason that it failed was that the costs for the event were underestimated due to a lack of careful planning and excessive extravagance. Greece simply could not afford the Olympics. The municipalities responsible for developing the area did not have the funds to sustain redevelopment and so the planned infrastructure and schools were never constructed, which inevitably withdrew from the value of the area. Another important factor to consider is the prolonged economic recession that Greece fell into later on, which the Games undoubtedly contributed towards. The following recession and debt crisis even more so meant that there were not enough funds to pay for the development. The lack of private sector involvement should also be taken into account – with Jay Scherer citing the Village as a ‘sobering portrait of the level of debt that can be accrued by the state in the absence of private investment in these developments’. There was also a lack of deliberation in terms of ‘environmental strategy and forward thinking’, or ‘economic feasibility studies or even a basic business plan’ as planners rushed to finish venues, leading to the soaring costs of the Games (cost nearly $11bn and double the initial budget), leaving diminishing funds behind to actually redevelop and maintain these venues.

 

Beijing (2008)

Less is known about the reality of the Beijing Olympic Village (2008) now, but it was developed into housing for upper-class Beijing residents and has gravitated towards Newington, rather than Athens’ example. Environmentally-friendly amenities were also included, with the Village being equipped with geothermal energy and solar panels and a micro-energy building, and reportedly, the city ‘tied its Olympic agenda to long-term land use development goals’. This increased the appeal of the units, which would have led to a rise in demand for them. According to China Daily, even people from outside Beijing expressed interest in the condos after the Olympics. Ge Huai’en, the Village’s marketing director, also stated that ‘about 70% of the apartments in the Olympic Village in northern Beijing had been sold before the Olympics’. The price of these flats practically doubled in a year and a half following their market release and surrounding real estate values rose.

Source: https://medium.com/@toby.lr/beijings-2008-olympic-developments-8-years-later-3f45a95d1171

 

London (2012)

The London Olympic Village, now converted into a neighbourhood north of Stratford town centre known as East Village, was developed on brownfield land, following the example of the 1992 Barcelona Games. Forbes has labelled East Village (and Olympic Park) as a ‘rip-roaring success’, and Ben O’Rourke claims that the London Olympics’ real-estate legacy is largely responsible for ‘London moving east’. Of the 2,818 new residences created, 1,379 were labelled as affordable homes and sold to Triathlon Homes. The remaining private homes, plots for a potentially 2,000 more residences and long-term management of East Village are managed by Get Living London and owned by Delancey/Qatari Diar. Now, East Village is labelled ‘London’s Hippest Postcode’, with its architecture looking to ‘emulate the much-loved planning of Maida Vale and other parts of Victorian west London’ and is a ‘rare example’ of a housing devlopment that ‘shows more thought and quality than most things comparable built in Britain in recent decades’. 

Source: https://inhabitgroup.com/project/east-village-london-e20/

East Village offers a variety of housing types, from apartments to townhouses and the neighbourhood also has facilities such as a school and health centre. Its transport links also serve as a major drawing point, for example, King’s Cross is fifteen minutes away, so despite its location, people are not overly deterred by that. The East Village’s success could be attributed to the dire need for affordable housing in London, especially following the Global Financial Crisis 2007-08. Overly high housing costs have long been an issue for Londoners, and naturally the housing in the East Village, part of which was marketed to be affordable, would have been in high demand and appealing to the public. The East Village was also designed with the environment in mind, with integrated transport, green open spaces (green roofs, wetland area, fruit trees etc.) and flats that adhere to a ‘high standard of energy-efficiency and insulation’. Long-term development was taken into account as well, with plans to have 24,000 new homes built in the area by 2031.

 

Rio De Janeiro (2016)

The Rio de Janeiro Olympic Village (2016) is, as Forbes describes it, a ‘ghost town’. It was built in the West Zone of Rio, in an upper-class neighbourhood. In a way, it was similar to Newington in that it was going to be developed as luxury housing, however the developer billionaire Carlos Carvalho seemed to lack an awareness of the true amount of demand for his luxury condos. He envisioned a ‘city of the elite, of good taste’ and that ‘for this reason, it needed to be noble housing, not housing for the poor’, with prices as high as $700,000. He may have had overly-ambitious prospects for the Village, which helped cause its current vacant state. 

source:https://architectureofthegames.net/wp-content/uploads/2017/03/Rio-2016-Olympic-Village-Apartments-on-sale-in-June.jpg

The key difference here between Rio and success stories like Newington is the overall financial state of the host countries – Sydney’s economy was arguably more stable, and there was a larger demand for middle-class or luxury housing than in Rio, where there is an ever-widening gulf between the rich and poor. Had there been increased community consultation and a greater awareness of what Rio actually needed, instead of purely focusing on financial motivation, as Carvalho seemed to have done, the project may have been more successful. Another factor, as Isabel Swan states, ‘I feel the Olympic Games in Brazil were not so successful because the legacy was not the number one concern’. The economic downturn and large fiscal deficit in Brazil did not help matters, and only 240 of the 3,600 units had been sold two weeks before the opening ceremony of the Games. Even now, apparently 93% of the condos are vacant. Furthermore, the Village during the Games did not have particularly favourable reviews either, with Kitty Chiller, the Australian Olympics boss, claiming that the units were ‘unliveable’. There are notable similarities between Athens and Rio – poor economic state, poor governance and poor time management, with both countries’ venues being built in a rush.

 

Tokyo’s Future

The successful Olympic Villages have several factors in common. They tend to be built as residences to be sold to the middle to higher classes, and the environment is often a priority. The economy, in particular the real estate market of the host country, also tends to be stable. Furthermore, if the host country is developed, this improves its chances on developing the Village aptly as there is a larger probability that they would have the funds to sustain this, especially since the opportunity cost of them hosting the Games in general is lower as they would likely already have most of the infrastructure required.

The Tokyo Village has already received favourable reviews from athletes on prominent news and social media platforms, enhancing its image for prospective buyers even more. Private developers would be responsible for ‘specific aspects’ of development due to their ‘capabilities and know-how’ to turn the former Village into a ‘new and convenient community where a diverse range of people live and interact with ease and comfort’ under a public-private partnership. Looking back at previous Olympic Villages starting from Athens, the successful cases tend to have some amount of private involvement. 

Housing Plans: https://www.2020games.metro.tokyo.lg.jp/modelplan_e.pdf

Source: https://news.panasonic.com/global/stories/2019/71599.html

Furthermore, it appears that the development has been carefully planned out with long-term environmental goals in mind, similar to the successful cases of Olympic Village development – as stated on the website, they hope to ‘prepare an environment that will be passed down to the next generation’. Although not permanent, the viral cardboard beds that the athletes slept on is already an indicator that sustainability is a prominent element of this year’s Village. Environmental stability is an attractive element for prospective buyers and could increase the property’s value.  Moreover, developers plan to install a hydrogen energy system and to use AI to forecast power demand, conserving energy. A ‘real forest’ is also in the works, and Harumi Flag hopes to create an ecosystem, complete with a hybrid irrigation waterscape and animals. The website continues to outline the effort being put into the design and redevelopment of the area, for example noting that the skyline would create a ‘rhythmic silhouette’ (translated), and outlining careful details such as light controls for ambience, non-slip pavements and more. These design details hint at the in-depth and long-term planning being put into Harumi Flag, which is a good sign for the future. 

During Phase 1 of sales to the public in May 2019, where 600 flats were released, there were already 7 applications for every flat released. In July 2019, more than 2,000 applications were made for the further 900 flats put on sale as well. Although sales were halted due to the pandemic, they are expected to resume following the Olympics this autumn. Whether or not demand would remain as significant remains to be seen, however, when looking at the state of the real estate market in Tokyo, prospects seem to be positive. Owing to Japan’s extremely low borrowing cost, there is ‘persistently high occupancy, stable and resilient rental income and attractive pricing’, says South China Morning Post, even calling Japan’s real-estate market ‘Asia’s star performer’. 

Of course, there are concerns. The lack of communication from developers to buyers about the delays due to the pandemic have led to buyers’ complaints making headlines, which may deter other prospective buyers. Market trends cannot be determined for sure either. Only time will tell, but for now, the future of the Tokyo Olympic Village certainly seems a lot more favourable than that of Athens or Rio. 

 

Reference:

  1. https://www.archdaily.com/964471/olympic-urbanism-the-afterlife-of-olympic-parks-and-stadiums
  2. https://resources.realestate.co.jp/news/demand-soars-for-tokyo-2020-olympic-village-apartments-to-be-repurposed-as-private-condominiums/
  3. https://www.flat-chat.com.au/olympic-village/
  4. https://www.flat-chat.com.au/olympic-village/
  5. https://www.rfi.fr/en/economy/20150705-struggling-survive-greeces-olympic-villagers-face-referendum-choice
  6. https://www.realestate.com.au/news/olympic-villages-past-and-present/
  7. https://www.rfi.fr/en/economy/20150705-struggling-survive-greeces-olympic-villagers-face-referendum-choice
  8. https://www.foxsports.com.au/olympics/worst-athletes-villages-in-games-history-amid-concerns-over-rio-2016-accommodation/news-story/335ff29947f742d1765354f62c33f11a
  9. https://www.realestate.com.au/news/olympic-villages-past-and-present/
  10. www.jstor.org/stable/42857457
  11. https://medium.com/@toby.lr/beijings-2008-olympic-developments-8-years-later-3f45a95d1171
  12. https://www.realestate.com.au/news/olympic-villages-past-and-present/
  13. http://www.asiabusinesscouncil.org/docs/BEE/GBCS/GBCS_OlympicVillage.pdf
  14. https://core.ac.uk/download/pdf/161451058.pdf
  15. https://www.chinadaily.com.cn/olympics/2008-09/12/content_7023975.htm
  16. https://core.ac.uk/download/pdf/161451058.pdf
  17. https://www.archdaily.com/964471/olympic-urbanism-the-afterlife-of-olympic-parks-and-stadiums
  18. https://www.forbes.com/sites/bisnow/2017/07/25/five-years-on-londons-olympic-real-estate-legacy-is-a-clear-winner/?sh=70049cc81364
  19. https://www.theguardian.com/artanddesign/2012/jan/08/athletes-village-olympics-2012-architecture
  20. https://www.internetgeography.net/topics/sustainable-urban-living-east-village/
  21. https://inhabitgroup.com/project/east-village-london-e20/
  22. https://www.forbes.com/sites/keithflamer/2017/02/28/the-olympic-shames-rio-and-athens-sports-venues-abandoned/?sh=12cbe762ca0c
  23. http://www.phantom-urbanism.com/rio-de-janeiro-olympic-village.html
  24. https://www.bbc.com/sport/olympics/39323546
  25. https://www.jstor.org/stable/10.7864/j.ctt1vjqnp9.13?seq=16#metadata_info_tab_contents
  26. https://www.realestate.com.au/news/olympic-villages-past-and-present/
  27. https://www.jstor.org/stable/10.7864/j.ctt1vjqnp9.13?seq=16#metadata_info_tab_contents
  28. https://www.jstor.org/stable/10.7864/j.ctt1vjqnp9.13?seq=26#metadata_info_tab_contents
  29. https://www.2020games.metro.tokyo.lg.jp/eng/taikaijyunbi/torikumi/facility/sensyu/modelplan/index.html
  30. https://www.31sumai.com/mfr/X1604/#!/article/19
  31. https://resources.realestate.co.jp/news/demand-soars-for-tokyo-2020-olympic-village-apartments-to-be-repurposed-as-private-condominiums/
  32. https://english.kyodonews.net/news/2020/03/c86c71dab2d5-athletes-village-condo-buyers-fret-after-tokyo-olympics-delay.html?phrase=14%&words=
  33. https://japanpropertycentral.com/tag/harumi-flag/

Another “Wake Up Call” for Building Maintenance

The maintenance issue is always a big topic for discussion all over the world. Although many engineers and specialists have given their point of view to show the importance of building maintenance, people always neglect the inspection report and not taking it seriously. Here is another “Wake Up Call” for us with the accident in Florida condo Collapse.

According to command7, it states that why a lot of facility managers react to problems as opposed to being proactive. It’s not hard to see why—with all of the pressure that there is to save money wherever possible, maintenance can often take a back seat to more immediate concerns. The problem is that waiting until something is broken to fix it is possibly cheaper in the short term, but can lead to an expensive surprise later on. Source: https://command7.com/importance-building-repair-maintenance-services/

Also from Ivor H. Seeley in his book” Building Maintenance” states that the building maintenance issue is being neglected.

“Major Structural Damage” in Champlain Towers

Source: https://www.theguardian.com/us-news/2021/jun/25/miami-condo-collapse-what-happened-latest

According to The Washington Post, an engineer warned in October 2018 that he had discovered “major structural damage” to a concrete slab below the pool deck in the section of the Champlain Towers South condominium building that collapsed Thursday, killing at least four and leaving scores trapped, according to records released by local authorities late Friday.

 

Source: Structural Field Survey Report – https://www.townofsurfsidefl.gov/docs/default-source/default-document-library/town-clerk-documents/champlain-towers-south-public-records/8777-collins-ave—structural-field-survey-report.pdf?sfvrsn=882a1194_2

Source: https://www.miamiherald.com/news/local/community/miami-dade/miami-beach/article252421658.html

Kit Miyamoto, a veteran Los Angeles-based structural engineer who specializes in structural resilience, said that a pillar or column supporting the building appeared to have failed. Corrosion by the salty air or a “differential settlement,” meaning differences between how sides of the building were sitting on the land, could have caused a pillar to collapse, he said.

“This is truly a classic failure of a column,” said Miyamoto, chief executive of Miyamoto International, a global earthquake and structural engineering firm. “It was supporting many stories and that’s why it happened very suddenly.”

Source: https://www.washingtonpost.com/national/champlain-towers-south-surfside/2021/06/26/a509519a-d5de-11eb-a53a-3b5450fdca7a_story.html?utm_campaign=wp_post_most&utm_medium=email&utm_source=newsletter&wpisrc=nl_most&carta-url=https%3A%2F%2Fs2.washingtonpost.com%2Fcar-ln-tr%2F34057fa%2F60d74d179d2fda8060e92572%2F596bd281ae7e8a44e7de95cc%2F11%2F72%2F60d74d179d2fda8060e92572

A ” Better Way” to understand the building condition

In GBE, we use the new technology to show our findings during the inspection in order to make our clients understand more about their unit or property condition. After the inspection, it always needs to act fast for repairing and maintenance for keeping the property in a good condition. Here are some examples of how GBE perform our findings in our inspection through Matterport.

Click here to know more about building defects!

There is always an indispensable relationship between buildings defects, structural stability, and public health. In general, non-structural cracks, structural cracks, concrete spalling, defective external wall finishes and water seepage, etc can be the common types of building defects, which can be easily found in buildings in which do not receive proper maintenance and repair.

Photo showing concrete spalling from the ceiling

Photo showing cracks inside staircase

Photo showing concrete spalling

Photo showing external wall tiles was found missing

Today, as a surveyor graduate trainee, I want to share some causes for the development of building defects. There can be a combination of factors in causing the above-mentioned defects. All property will face some sort of defects during its life span. As a surveyor graduate trainee, we shouldn’t solely focus on the physical look of building defects, we need to observe the surrounding environment and the actual usage in concluding the cause of the particular building defects.

Design, material, construction, usage, and maintenance are the common angles in diagnosis the causes of defects. Taking concrete spalling as one of the examples, given the design stage, when the building is located near the sea, the chloride attack raised from the sea may corrode the steel bar. With the corrosion of the rebar, the volume of rebar inside the concrete will expand 8 times. Crack and concrete spalling may be found.   At the same time, concerning the construction stage, the high water-cement ratio may bring void for the concrete surface due to the increase in permeability, which has the potential possibility to enhance the corrosion of rebar (you can refer to the blog from GBE dated on 28 June 2020). From the above reasons, we understand that the building defects may not be caused by a single reason only. It is the responsibility of the professional to conduct a detailed building inspection before jumping to a conclusion.

Photo showing the stage of rebar corrosion (retrieved from structural engineering blog)

Water Seepage is also a common building defect in aged buildings. The sources of water may come from rain, groundwater, element, condensation, plumbing, drainage, and user activities. When we observe some symptoms like water stains, water dripping, rusty stains, peeling of paint during the inspection, suspected water seepage maybe happened. Before diagnosing the source of water seepage, a preliminary desk study is required (if you wanna know about the details of desk study in how to tackle the annoying issue comes from water dripping in the living area, you mustn’t miss the blog from GBE dated on 4 Jan 2021). We may need to collect some background information like the location of dampness, the frequency of occurrence, the extent of the dampness, repair record, any complaints on the water seepage in identifying the source of such dampness. Visual Inspection and some testing tools like moisture mete can be applied in determining the source of seepage. In some cases, where we suspected the water seepage was caused by the defective waterproofing membrane from the upper unit or roof, a water ponding test may be adopted. At the same time, when we suspected the water dampness was raised by the leakage of the plumbing pipe, a meter test can be adopted in deterring the actual source of such seepage.

Photo showing a suspected case of water seepage

In order to maintain a safe and healthy environment for occupants, routine inspection, repair works, and maintenance works are suggested to carry out in every building.

Fire Safety in Commercial Premises

Fire safety can be regarded as one of the primary considerations in building designs. The terms of fire safety cover a wide range of building concepts, ordinances, and regulations under the law. When we consider the fire safety works in banks, the concept of Fire Safety (Commercial Premises) Ordinance should not be omitted. The introduction of FS(CP)O is one of the ordinances which aims to provide better protection to the occupants and visitors on certain kinds of commercial premises.

Prescribed commercial premises and specified commercial buildings are under the scope of the ordinance.  For the captioned the premise, they are required to update that fire safety construction including means of escape, means of access, fire-resisting construction under the Code of Practice for the Provision of Means of Escape in Case of Fire 1996, Code of Practice for Fire Resisting Construction 1996, Code of Practice for the Provision of Means of Access for Firefighting and Rescue 1995 respectively. Also, the premises required to update fire services installation following Codes of Practice for Minimum Fire Service Installations and Equipment and Inspection, Testing, and Maintenance of Installations and Equipment 1994 when the total floor area exceeds 230 square meters.

As a building professional to cope with the above issue, a desktop study needs to be conducted first. It is essential to calculate the number/width of the exit door and exit route following the purposed usage of the premises. The comparison of the recorded plan and Fire Safety (Commercial Premises) Ordinance may draw attention to the fire safety deficiencies. The site visit is followed to identify the deficiencies. fire services system always associates with water supplies and electricity. For the aged building, some non-emergency services like electricity will be located in the exit route. However, those non-emergency services did not enclose by FRR materials. It may post a potential fire hazard. Insufficient width of the MOE route, insufficient number of exit routes to the required staircase, presence of the fire shutter in the exit route, absence of exit sign, absence of the exit door, etc are the common scenario for the aged commercial premises to deal with the ordinance. The reasons for the above deficiency can be caused by certain reasons including the change in use, the absence of the fire safety ordinance during the construction period, and unauthorized building works by the owners.

Pitfalls of Buying Off-Plan Overseas

Buying Off-Plan Property is a well established practice in Hong Kong. Buyers enjoy a discount, staged payments, and more choices to choose from. This popularity is built on the foundation of regulations that protects the buyers, results of painful experience of yesteryears. With the current surge of outbound investments, especially in residential markets that are familiar to many, investors should examine these opportunities when buying Off-Plan. 

Many assume that the Common Law countries would provide the same level of protection as does Hong Kong, being a former British colony. However, selling Off-Plan Properties was not a common practice, and such sales are much less regulated than in Hong Kong. There is no shortage of examples where overseas buyers lose money on these deals due to lack of oversight. These issues may range from delays in completion, over budget, building quality, developer solvency issues, or even outright cheating investors. Oftentimes, the process of planning permissions and other government approvals may take much longer than in Hong Kong.

Taxation and law differences are often overlooked by oversea investors. Unlike Hong Kong, many countries do not experience a high rate of value appreciation in real estate, and have policies to keep the residential market from overheating via fees and tax, wiping out the bulk of the investment return. In addition, mortgages may be easily obtained, especially for foreign investors. Local law may have material impact on the investment as well. In Australia, when the S&P agreement is signed, the buyer is on the hook to complete, and there is no simply forfeiting the deposit like in Hong Kong. 

When investing overseas, many have the same assumptions from their hometown. In Hong Kong, apartment flats near public transportation are desirable and can fetch a premium. The opposite is true in Japanese suburbs. In Western countries, houses are preferred over apartments located in busy districts. Buyers may find it difficult to exit their investment if they were equipped with wrong assumptions.

Overseas investors may still enjoy the benefits associated with pre sales, or buying Off-Plan. However, one must fully understand the local market, laws, fees involved, and proper due diligence on the developers. 

 

Technical due diligence is one of our professional services to assist the complete of asset transaction. This exercise is to over-sight the major technical issues found in the real estate asset such as building blocks, apartment, carpark space, facilities or even open-space.

The technical issues can be considered in multiple-fold expertise knowledge. This covers the compliance issues, user operational safety, maintenance and upkeep issues, building structural issue, hygienic performance, existing usages issues and building performance such as energy consumption, Indoor air quality, water proofing and thermal proofing. Each individual aspects can be further drilled to become specialist’s attention . Nevertheless, a judgement call is needed to balance the depth of research and the purpose of this TDD services.

In reality, there is no building comes with perfect. Even a brand new building does carry some issues or problems. Thus , a Professional Surveyor needs to consider the weighting of each observation an explain clearly the gravity of each observation in relation to the asset performance.

In commercial world , the straight and simple way to present the importance and weighting of each issues is by means of CAPEX. This is the capital expense which may be spent on it to fix the issues if needed or if the issues become profoundly importance. Again ,the CAPEX estimation is quite tricky and demands the judgement calls. In the course of TDD, we shall examine the planned maintenance program and identify the upcoming possible repair or replacement works. We also check the maintenance logbook to find the clues about some issues like water seepage. Unfortunately, not all the buildings are well maintained with paper record nor being under the planned maintenance program. An experience curve is thus built up for formulation the judgement calls in the right and more predictive way when we need to present the CAPEX.

 

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The Case for Building Better Residential

Residential properties in mega metropolitan cities are often short of satisfaction for occupiers. Many may find their flat small, inefficient, and developers trying to cram in all kinds of features with the hope of justifying its price. This is a result of residential units built to prioritize developer’s profit over end user’s satisfaction. With WFH becoming a well adopted trend due to Covid-19, tenants and occupiers are now reexamining their homes, and demanding higher quality space that is compatible with the current environment, and less so on the building’s location or proximity to the CBD.

Taking the Kennedy Terrace project as an example, a building that was designed with the end user is the priority. With a peerless 3700 sqft for its 3 en-suite standard simplex, it sits comfortably on the top of luxury residential tenants’ shortlist. As a direct consequence of not building 1800 sqft flats, competing with the surrendering offerings, Kennedy Terrace achieved approximately double that of neighboring apartment buildings when compared on a per sqft basis. The ample ceiling height, efficient layout of the unit, and the centralization of the apartment’s electrical system make the flat the ultimate blank canvas for its occupiers to personalize the unit to their heart’s content

Increasingly, landlords and developers of luxury residential sites are now faced with a dichotomy, whether to prioritize the volume of units available, or catering to the undeserved demand for larger space such as Kennedy Terrace. While the decision to provide truly spacious flats at the expense of a number of units may seem counterproductive at the beginning, filling the glaring disconnect between developer and end user’s may be as rewarding, if not more.