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Is Singapore’s Renovation Industry Really a Nightmare as People Say?

May 19, 2022
BOOKMARK

A close look at the good and bad.

“Nightmare” and “shady” are two words that Singapore’s renovation industry is often labelled with – and sadly, there’s some truth to these descriptions.

For instance, a recent expose by CNA cited numbers from the Consumer Association of Singapore (CASE) showing that complaints against renovation contractors have been hovering between 869 to 1,300 every year from 2019 to 2021.

And in yet another piece published by The Straits Times, it was mentioned that “complaints about the renovation sector were one of the highest across the various industries” which CASE oversees.

Singapore renovation

Separately, there have also been various commentary pieces and social news forum discussions, speaking out about pain points like the lack of industry regulation, as well as price opacity.

Still, in the face of these issues, one must ask: Is navigating Singapore’s renovation industry truly that big of a nightmare?

To dig deep for answers, we asked interior designers from three reputable local firms – namely Free Space Intent, Summerhaus D’zign, and Toke & Chen – to share their thoughts and insights.


Why the renovation industry in Singapore is flawed

There are several reasons why the renovation and interior design industries in Singapore are often perceived to be problematic by homeowners. These include widely practiced but (arguably) flawed business processes, a lack of industry-dedicated regulation, and of course, the existence of ‘black sheep’ companies.

Quotation ‘culture’ and why it often results in friction

The practice of asking for, and also, giving quotations is a tradition that’s deeply engrained amongst consumers as well as home renovation businesses in Singapore.

And while there’s nothing explicitly wrong with this ‘culture’ (because customers deserve to know how much a service costs before committing to a purchase), the issue lies with how quotations are often expected AND given before the start of the creative process.

“Usually, when homeowners visit renovation firms, they’ll ask for a quotation right at the start so that they can compare prices,” shares Free Space Intent associate director Leon Luo.

“Generally, most companies will respond to their requests, but the problem is that these quotes are usually given without reference to a complete design plan, which can cause misunderstandings down the road.”

Singapore renovation

Leon’s explanation is thus. When quotations are given without a firm concept in mind, friction arises due to the difference in the quoted price and the actual cost of a project after everything has been accounted for, including any add-ons or variation orders (i.e., the final bill).

“I think, as a consumer, it’s hard not to feel that you’ve been played when you’re asked to pay extra, even when the additional costs are justified,” says Leon. “It’s also hard for a renovation firm to keep explaining to their clients that they’ve to make additional payments beyond what was initially quoted.”

To avoid scenarios like this, some firms, including Free Space Intent, opt to onboard homeowners first as design clients and then as renovation clients.

This business practice entails working together with homeowners to fully flesh out a concept for their renovation (including 3D drawings as well as revisions), and only starting the home makeover after plans and prices are firmed up as much as possible.

Says Leon: “Doing it this way makes the business relationship better. As a client, you’ll understand what you’re getting and how much they’ll cost, and as a designer, it makes it easier for me to explain any cost changes when a different item or material is used.”

Interior designers and renovators in Singapore sometimes wear (too) many hats

Another prevalent feature of Singapore’s interior design industry, which also makes it less than perfect, is that local designers often wear multiple hats.

For a start, many are expected to come up with room concepts and be on the ground as project managers to ensure the ideas they’ve proposed are brought to life.

“I have talked to homeowners from other countries like Europe and Australia, and most of them see interior design and project management as very distinct professions and services,” says Leon.

“But in Singapore, these roles are in a way mixed together. Not just because Singaporeans perceive interior designers to be project managers, but also because there are interior designers who actually handle project management as well.”

Singapore renovation

That said, this overlap doesn’t necessarily impact consumers negatively provided that the interior designers hired are competent in handling both creative and project management work. But things can get complicated, if these designers also belong to renovation firms that are excessively aggressive in their pursuit of profit.

“It’s not the case for every firm in the industry, but some companies are highly profit-driven. Their designers are under pressure all the time to take on more projects because their salaries are entirely commission-based,” explains Leon.

A common outcome in such scenarios? Interior designers who simply have too much on their plate, and are unable to give homeowners their fullest attention, even if they wish to do so.

The lack of a regulatory body in Singapore that oversees the entire design-and-build industry

Unlike other professional service industries in Singapore, such as real estate or architecture, the interior design scene in Singapore isn’t closely managed by a regulatory body.

Says Larry: “To become a registered architect in Singapore, you’re required by law to be approved by the BOA (Board of Architects). But to start an interior design company? There’s no approval needed from an equivalent board, nor are there any compulsory requirements or even certifications required.”

“That’s why there are fly-by-night businesses out there; they hire almost anyone just to bring in sales, even if they don’t have a design background or aren’t design-trained. It only takes these rotten apples to spoil the whole barrel.”

Singapore renovation

Image source: SIDS

In response to the lack of consumer confidence as well as to uphold the level of professionalism in the industry, local design societies have stepped up to the plate in recent years, either by implementing codes of conduct and/or accreditations for their members.

Two such examples are the Interior Design Confederation Singapore (IDCS) and the Society of Interior Designers Singapore (SIDS), the latter of which is currently working with the DesignSingapore Council to improve the industry.

However, while these are certainly steps in the right direction, more needs to be done.

“Why I believe this to be the case is because the end-all isn’t set in stone yet,” says Julian Chen, the co-founder of local design consultancy Toke & Chen. “For example, out of these two bodies (IDCS and SIDS), whose standards should the industry follow? I think that’s not very clear to businesses and consumers right now.”

Singapore renovation

Image source: SIDS

“Also, although you can’t root out 100% of the black sheep, it shouldn’t be a reason for consumers to feign ignorance (of bad business practices). I think the best solution for the market is to tackle the issue from both ends, where both end-users and service providers strive for higher standards of design education,” further adds Julian.

“It’s a two-way thing. Consumers should get to know how interior design projects are done properly, because it’s their own money that they’re committing to a renovation.”

“As for designers, they can be taught on how to communicate better with their clients so that they can better bridge the expectation-reality gap, as well as how to make the entire creative process more inclusive for homeowners.”


Why there’s still hope for homeowners and the renovation industry

Despite all the shortcomings mentioned above, not all is lost, because the interior designers we’ve spoken to are fully aware of what’s lacking in the industry. Here are the good practices that are in place at their firms, and why there’s still hope:

Explaining to their clients what they’re paying for, including markups and price differences

The practice of marking up on services and materials is a much-maligned aspect of the renovation industry in Singapore, particularly because of the perceived lack of transparency on the part of interior design firms.

In contrast, both Larry and Leon expressed that they were willing to break down the charges of their respective firms.

“Of course, because of business privacy reasons, we don’t go to the extent of specifying every single percentage amount that we earn on each item at Summerhaus. But if our clients ask, we’ll be as upfront as possible to them,” says Larry.

“In fact, these markups don’t go entirely to our profit margins, because they act partly as a buffer for certain unforeseen circumstances, like when there are changes to project costs or when rectifications are needed,” Larry adds.

“These are costs that we sometimes rely on our markups to cover, so that we don’t have to keep billing our clients every time there’s a price fluctuation.”

Chai Chee by Free Space Intent

Interior Firm: Free Space Intent

Similarly, Leon mentioned that he does make efforts to explain any differences between what Free Space Intent charges for its services and what’s being quoted by other renovation firms.

“Sometimes, customers will ask me why we charge more for certain items, like say carpentry, and I’ll break it down to them – that it’s because of the type of hardware or laminates used, or even the level of detailing on the cabinets,” says Leon.

“People like to make comparisons based on pricing alone, but once we’ve explained why things cost what they do and give homeowners more context, they’ll understand.”

Ang Mo Kio Street 32 by Toke & Chen

Interior Firm: Toke & Chen

Toke & Chen takes this practice one step further by being fully transparent about the total sum of money it earns from a project.

“As strange a practice it is for Singapore, we reveal our profits to the end-users,” says Julian.

“Most firms use markups to bake their profits into the quoted cost of a project, but instead what we do is that we simply charge a flat fee for project management, and the rest of the money that our clients put into the renovation goes entirely towards their house,” he explains.

“The reason why we chose to do this is because we realised that the markup model, which just to be clear is perfectly valid, brings with it conflicts of interest. So, by avoiding markups, we’re able to focus more on the design aspect of our work, rather than the financial aspect of it.”

Collecting payment only after the confirmed completion of key project milestones

Other than delivering slipshod work, ‘black sheep’ renovation businesses are also known to exploit homeowners by charging large sums of money before any services are delivered. In at least one recent case, a homeowner was charged 94% of their total renovation contract sum, which amounted to $49,000, before project completion.

Singapore renovation

An example of a milestone payment schedule in a renovation contract

Scams like this are why every designer that we spoke to cautioned against working with firms that charge large sums of money right off the bat and/or bill homeowners before a specified milestone is completed.

Unlike ‘black sheep’ companies, reputable firms like the ones we’ve featured in this piece, only bill their clients after progress has been confirmed, even though the specific percentage amounts they charge at each stage may vary.

“For smaller projects, companies might make a slightly bigger percentage claim at the start to float the initial cost of hiring labour and buying materials, but it shouldn’t be a ridiculous amount like 70% of a project’s contract sum,” says Larry.

Not taking on more projects than their teams can manage

Sometimes, in the pursuit of profit, renovation companies will take on more projects than they can handle, which contributes to another common frustration amongst homeowners: renovation delays.

“Because some designers in mass-market firms are working on a full-commission basis, they’ll need a constant stream of projects, so they tend to take on many clients as they can,” says Leon.

“Though the bulk of these projects involve smaller-scale strata properties like new BTO flats, which can be easily coordinated, the timelines can become overwhelming if these designers don’t limit themselves. When that happens, it’s the clients who’re on the losing end.”

Mount Faber Lodge by Summerhaus D’zign

Interior Firm: Summerhaus D’zign

The solution, however, can be rather straightforward, which is to simply avoid chewing off more than can be bitten.

For instance, at Summerhaus D’zign, every designer “doesn’t juggle more than 3 ongoing projects”.

“Our projects tend to be very intensive. So, to keep the quality of work and client communication consistently high, we make sure not to take in too many projects at any one point of time,” says Larry.

“So, unfortunately, sometimes we have to tell new enquiries that we don’t have the capacity to take on their projects. But that’s better than getting one-star ratings on social media and damaging our reputation because of severe delays.”


To sum up

If there’s one conclusive thing to be said about the current state of Singapore’s renovation industry, it’s that it’s flawed. But there’s good as well.

Mountbatten by Toke & Chen

Interior Firm: Toke & Chen

As Julian puts it: “The design scene in Singapore is great. It’s not the best because nothing’s perfect. But at least, we’re achieving a higher standard than how things were ten years ago."

In other words, things are indeed heading in the right direction – and it’s going to take a lot more than a couple of ‘black sheep’ before it’s justifiable to call the entire Singapore renovation industry a nightmare.

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