DBSS flats losing relevance?

Analysts said flats sold under the Design, Build and Sell Scheme (DBSS) may be losing their relevance, as the gap in the housing market they previously served is now covered by Build-To-Order (BTO) flats.

The income ceiling to qualify for a BTO flat was recently raised to S$10,000 – the same as DBSS flats.

Since the public outcry over the record-breaking asking prices of a previous DBSS launch, Centrale 8, and the following clamp-down on land sales for such projects, some analysts believe the days of DBSS projects are numbered.

But in the housing market, it’s all about location and pricing.

Belvia in Bedok is the latest DBSS project to be launched.

It saw a healthy crowd, receiving more than 200 applications on its first day.

Raymond Chia, CEO of CEL Development, said: “Bedok Reservoir is a mature estate; we feel there’s a ready demand. If you look at houses around here, they are mainly 20 to 30 years old. People who’ve grown up in the area, they are familiar with the surroundings and amenities. Out of convenience and to be near their parents, this can be a choice to them.”

And instead of being a negative impact, Mr Chia sees the outcry over Centrale 8 as a “talking point”.

Developer Sim Lian’s Centrale 8 made the news in June when its highest asking price for a DBSS flat was S$880,000 – almost as expensive as Executive Condominiums, which boast amenities such as swimming pools and tennis courts.

Sim Lim eventually backed down and slashed $100,000 off its priciest units.

The 488-unit Belvia project has 3-room to 5-room units, and an indicative price of $570 per square foot.

“Transport is quite convenient, and a new MRT is coming up. And it’s near to the PIE and if you want to go somewhere it’s very convenient,” said one Singapore resident.

“I grew up in the East, and my parents are just staying nearby. I think the location is tied with the price. So I believe with the new MRT to be built, I think the price to pay is justifiable,” said another.

Market watchers point out that DBSS projects are public housing and have to be priced accordingly.

Mohd Ismail, CEO of PropNex, said: “DBSS price should be at least 20 per cent cheaper than executive condos, or slightly more; it could be about 25 per cent, that would be ideal.

“It would make very little sense for someone to pay a high price where the differentiation between executive condos and (DBSS flats) is not even 20 per cent. Then I think you’re not entering into a good deal.”

Two other DBSS projects will be launched later this month in Clementi and Jurong.

Source : Channel NewsAsia – 14 Oct 2011

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