Warren's Home

People who read this blog - yes all 3 of you, would remember that we introduced you to Warren Liu in an earlier post.

One may even remember that  we found him via the Straits Times in this article.

One month after our initial meeting, Warren was kind enough to show us the house mentioned in the article. His home.

The reason why he showed us the house, was because it was a relatively modest build costing him ~$250 per sq ft.

It was a beautiful home

in hot tropical Singapore, it was a pleasure to sit in his kitchen without the fan on, and enjoy the breeze.

I wasn't a fan of the eclectic furniture choice, but only because I'm quite conservative about furniture and furnishings... but really, everything was gorgeous, given the costs.

I think I would look for alternatives in some areas... instead of aluminium shutters, maybe I would go with wooden plantation shutters... but of course the point at which we delve into the details on architectural finishing is still miles away.

The couple of things I did love:

• The use of space - from a land area of ~1400 sq feet, he cleverly built a >3300 sq ft house
• He managed 3 bedrooms + 2 studies (1 convertible into a guest room) + 1 utility room + a gorgeous multi-tiered open plan living area
• a GREEN roof! like grass... on a roof!
• Gadgets galore (thank you Sonos)
• I was ambivalent about bringing the outdoors in, but my wife loved all the greenery
• oh and check out the pièce de résistance... a TV in the dining table.

View professional pics of his home here.

Light-Gauge Steel Construction

So there's a slight (30-50% if we're counting) disconnect between how much money we can potentially spare and how much it would cost to build our dream house. As a consequence, we had 2 options. 1) scale back on our dream, or 2)kick the can down the road and dream a little dream at a later time.

With the latter approach, there is no guarantee we'll ever get to it... :(

So we got to thinking... and researching.

One way to get over >3000sq feet of space at under $300 per sq ft in Singapore is to find ways to cut costs. Why construction is so expensive in Singapore is because of labour.

So how do we save time & money? Alternative construction methods. Brick and mortar construction can take up to a year to complete a 3,500 sq ft home. Using light-gauge steel construction however, means that we can cut costs by over 30%... what is it?

https://www.bca.gov.sg/publications/BuildabilitySeries/others/bsl_cp9.pdf

Steel is widely used in the construction of multi-storey buildings. However, steel construction is seldom used and is traditionally considered uneconomical for landed properties. In many parts of the world, timber or structural brickwork is preferred whereas in Singapore, reinforced concrete construction is usually preferred for landed properties. Over the years, various improved systems have been developed for use in landed properties. An economical light gauge steel frame system is increasingly being used in America, Europe, Australia and New Zealand. This light gauge steel frame is developed through a cold-formed process without the use of heat. This process enables steel manufacturers to produce light-weight but high tensile steel sheets. The sheet surface is coated with a zinc alloy that completely covers the steel surface and seals it from the corrosive action of its environment. This results in buildings that are more solid, rigid, stronger, durable and easier to build. As such, the light gauge steel frame system is an attractive alternative for use in landed properties. This is particularly in view of concerns on the depletion of timber resources and low productivities associated with reinforced concrete construction. 

Over the weekend, we visited a 3 storey building that was erected in 1 month. That's right folk - an entire school block. Time being money, is finally playing in our favour.

Reservations

One of the key reservations we have about this form of construction is that impact noise is very perceptible. if you knock on the walls (made of chip board), or jump on the floor, you can hear the reverberation. This gives one the impression that it is not as sturdy as your typical reinforced concrete construction.

Also, I was asked by someone I spoke to: "if there was a riot, could someone hack into your home with an axe?" my immediate reaction was that if someone had an axe, chances are they'd be able to breach any door or window in a conventional home... but I understand where he was coming from. There is a certain disconcerting feeling around chip-board or even concrete-fibre walls when you've lived your life around concrete... maybe it's time for a change. 


light gauge steel construction in action

THE COSTS OF FINANCING A HOME (BUILD) IN SINGAPORE

Financing, Refinancing & Doing the Tango

In truth, this has nothing to do with the Tango - although conversations with banks (or rather bankers) sometimes feels like it.

Wait - let me qualify. I don't dance the Tango (or any formal dance really) because I don't like to. same way I don't like speaking to bankers, or anyone really. That's why I blog. it's sad, I know, but i digress.

To set the context,  this is what the existing (inter-bank) interest rates look like

Updates can be obtained from http://www.moneysmart.sg/home-loan/sibor-trend

It does not look good if you want a loan as we have interest rates creeping upwards.

Ok here's the deal. I have a mortgage for the existing property. The good news is, I have a property; the better news, is that the property has actually appreciated in the last 10 years. so I have a few options to extract the value from my property.

In order to get a construction loan, banks typically have given me the following terms & conditions:

Construction Loan Financing:

Up to 70%  of the construction cost and subject to approval. Construction cost must not exceed land cost

Interest charge

~6.00% Upon issuance of the Temporary Occupation Permit (TOP), the construction loan will be converted to a housing loan at the prevailing interest rate and remaining loan tenure.

Loan size

Minimum loan amount is S$200k and maximum S$2m

Loan tenure

Up to your age 65 years olf or 30 years loan tenure whichever is earlier For construction loan, project mus be completed within 24 months from 1st drawdown

Valuation

Will be conducted in 2 stages: - prior to disbursement - at TOP stage

There are a bunch of other clauses, but it's pretty boring. Bottom line is that for a $1 mil build, the cash outlay will be a whopping $300,000. I DON'T HAVE $300,000 lying around!!!! And If I did, I wouldn't te telling everyone on a blog!!! (trust me I don't)

Anyway, the alternative, is an equity based term load. ie, using the value of my property as collateral to take a loan.

Home Equity/Term Loan Financing:

There is certainly more flexibility in this, but EVENTUALLY, the interest rate would be higher than if you took a construction loan which you could convert into a home loan upon completion of the build.

One bank gave me a detailed breakdown on repayment based on a $1 mil loan. the various permutations, taking into account rising interest rates are as follows.

The repayment schedule based on a ~1% Sibor

Year	Year 1	Year 2	Year 3	Year 4...
Gross Interest Rates (p.a.)	2.43075%	2.43075%	2.43075%	2.48075%
Monthly Instalment	$3,915.30	$3,915.30	$3,915.30	$3,938.94
	Over 3 Years	Over 5 Years	Over 10 Years	Over Loan Term
Total Interest Payable	$70,454.71	$115,403.34	$216,469.92	$417,165.71
Total MI Payable	$140,950.76	$235,485.20	$471,821.30	$1,417,165.71

The repayment schedule based on a ~2% Sibor

Year	Year 1	Year 2	Year 3	Year 4...
Gross Interest Rates (p.a.)	3.43075%	3.43075%	3.43075%	3.48075%
Monthly Instalment	$4,451.88	$4,451.88	$4,451.88	$4,477.42
	Over 3 Years	Over 5 Years	Over 10 Years	Over Loan Term
Total Interest Payable	$99,958.22	$163,942.10	$309,712.58	$610,952.62
Total MI Payable	$160,267.69	$267,725.83	$536,371.19	$1,610,952.62

BEST OF BOTH WORLDS

So, I'm not totally convinced that we can afford this rebuild. BUT, if we did want to game it, we could take a $400k Home Equity Loan (on the pretext of "personal investments") and thereafter, take a 70% construction loan for the explicit purpose of the rebuild.

The alternative, and I am waiting for other banks to get back to me, is to refinance my mortgage completely.

THE COST OF BUILDING A HOME IN SINGAPORE

It's all about the money

Building Costs (Buildings Cost!)

According to all the architects that we have spoken to, including our top 3, mentioned here, here and here, the costs for building a bespoke home average $320-400 per square foot. So a property that has 3,500 sq feet built in (325 sq m) would cost S$1.1 mil to $1.4 mil. Someone we know, is paying upwards of $500 per sq m for an extremely luxe build.

If you want gross construction figures and statistics, you may refer to Langdon & Seah's Construction Cost Handbook. For other countries in Asia, you may download other handbooks from here. The costs here, based on Construction Floor Area (CFA) put a 325 sq m semi-detached house at $877k to $1.02 mil.

CFA of course excludes all the bits and bobs outside of the actual house (eg. garden, car porch etc.)

Of particular interest, is the breakdown of costs. turns out the bulk of the costs are in architectural finishes. So ultimately, the cost of the home is tied to the quality of the finishes and fittings.

What I'm hearing more and more is that glass is expensive. the more light you want to let in, the more it's gonna cost.

Architectural & Other Professional Fees

According to the Singapore Institute of Architects, all members (read architects) are free to set their own fees.

So we've had quite a few interesting quotes ranging from fixed fees, to percentage of total estimated build.

A ballpark for a build of our scale, is $70k-$100k in architectural fees alone.

Then there is more.

A structural engineer will likely come in at $20k

A quantity surveyor will come in at $15k (but Architects may be willing to do this for a project of this scale)

Others, including your land surveyors, clerk-of-works & soil testing could likely set you back a further $15k

Of course, you need to set aside a budget of submissions to all the authorities, and that will likely cost you $15-20k

The BIG Total

Building costs: $1mil to $1.4 mil

Professional fees: $120k - $160k

Furniture: (oh gosh! we're going to be sleeping on straw mats at this rate!!!)

S$1.2mil - S$2 mil 

ok let's see what the banks come back with!!!

Meeting #3 - HYLA Architects

HYLA Architects was for us the most mind blowing of meetings. For one, this was the first meeting we had in a plush office in the most chic of wining & dining neighborhoods.

We were greeted in the board room by wooden models of some their more recent works. Light walls highlighted some of the glorious properties they've worked on, some of which are shown below.

If we were choosing an architect based on design alone (read "budgets not a priority") then these would be our guys. 

Also, they were very polished. They had a response for everyone of our requirements. Ventilation important to you? Please have a look at this project (shown on a large flatscreen TV built flush against the boardroom wall). Wow. 

They also shared something that I had never seen before. We got a copy of their portfolio and attached to that, a design questionnaire which sought our inputs on the use of the property and the requirements of each of the members of the household. Nice. I think that this should really be a best practice adopted by all architects. 

Did we mention beautifully bound too?

Han, the principal who spent the hour with us also promised to send across a budget plan for us to work off. This should help us understand the minutiae of costs involved in our rebuild. 

Han Loke Kwang

The principal of HYLA is an industry veteran. The Colombo plan scholar has won multiple architectural awards and most importantly specializes in rebuilds such as ours. 

I don't think that Han has made the job of architect picking an easy one for us. But he has given us plenty to think about. Primarily, if we should rush into this, or wait it out, consolidate our funds and spend the "right amount" only when we can afford it. 

Next stop, our friendly bankers. 

(Photos courtesy of HYLA Architects)

Reasons we want a new home

According to this website, the top reasons to build a new home include:

It's NEW!

No one else has ever lived in it before, so everything is clean and brand new.

Contemporary Floor Plans

Designs evolve. Old, obsolete homes may not address the way people live today. 

Customize Your Home

Build your home to order. You help design your own living environment, just the way you want it. 

  

Safer And Healthier

Wiring systems are up-to-date. Hazardous materials, such as asbestos, formaldehyde and lead, have been eliminated from new home building products. 

Energy Efficient & Technologically Current

Energy efficient windows. Better insulation technologies. Better control of air infiltration, resulting in healthier indoor air quality. Modern heating & cooling system. 

Financial Advantages

Build home equity. Roll the cost of upgrades into your mortgage and pay over time.

etc.etc...

The real reason why we're looking to build a new home now, is simply because our neighbour is doing the same.

woah *insert the squeaky sound of a record being played in reverse if you will*

It is NOT a "keeping up with the Joneses" kind of a thing.

a) they are a really nice chinese family so their last name isn't Jones

b) we do want to enlarge our living space to accommodate the needs of our quickly growing kids; and 

c) here's the story with what's happening with the Joneses neighbours.

Here we are Circa 2015

We live in house 'C'. An intermediate terrace sandwiched between two other houses. It gets a lil' dark, but no big deal so far.

What's happening now tho' is that our neighbours (Joneses "B") have demolished their home and are looking to rebuild it as a semi-detached property.

The issue for us, is that when we rebuild our home, we will no longer be allowed to redevelop it as an intermediate terrace; but rather we are obliged to build a semi-detached home as well. 

Now, having to change to a semi-d means that we loose ~30sq meters of living space because of a setback requirement. To make up for this loss of space, we will, in all likelihood have to add an additional storey (see MAN CAVE) and this means that the build we were dreaming of in the past needed to change.

So there - we don't NEED to rebuild. we just needed an excuse to do it.

Oh and the man cave thing.

Meeting #2 - REGULATE

AD LAB

Anyone remember the 1995 hit "Regulate"? no? HOW DARE YOU!?!? Warren G is the step-brother of Dr. Dre. The Mayor of Long Beach, California dedicated the week of August 1 to 6, 2005 as the "Warren G Week," because of the time he's donated time to the community.

Now go refresh your memory with this. No man with an entire week named after him should ever be forgotten.

Ok where was I? building houses? right. Still reeling from our meeting with Lee May Ann a couple of nights ago, we really were hoping that Warren Liu, Principal of AD LAB wouldn't be right for us. This was afterall a boutique Architectural practice with over 15 people and they do some pretty kick-ass, cutting edge, forward looking kinda design stuff.

AND we found him via the Straits Times in this article. 

BUT, since we started this hunt 2 weeks ago, and we had committed to this meeting since, we went ahead and dragged our feet to this meeting.

DAMMIT! We were once again blown away. This guy is good.

Warren really put us at ease. We thought that we were better prepared than during our first meeting, so we were throwing all the hard questions with our newly acquired architectural vocabulary. He was unfazed and wowed us with solution after solution, option after option. MOST IMPORTANTLY, this guy excited us with the possibility of new building methods and materials rarely seen in Singapore. If we appoint him, we would be pushing quite a few firsts in this country. I like. #granddesigns #KevinMcCloud

PLUS, his designs were quite kick-ass.

Photos all courtesy of  http://www.a-dlab.com/

This design I didn't like because I thought it was too modern & angular for me - but I think that there are still design elements I could gladly incorporate.

http://www.habitusliving.com.sg/projects/house-with-a-spiralling-garden

About Warren Liu

Ok - I couldn't bring myself to stalk the guy, so I haven't yet started to dig up his CV. what I did find is a whole bunch of awards including one from URA pitching him as one of 20 under 45. sounds like an impressive enough title.

Oh and here's a video of him