Land sales under the Design, Build and Sell Scheme (DBSS) have been suspended.
This is because the DBSS is currently under review by the Ministry of National Development (MND).
Responding to media queries, MND said the Housing & Development Board (HDB) would not proceed with the sale of a Bendemeer Road site which was scheduled for launch in the first half of this year.
MND has reiterated it would review the need for DBSS, following Minister for National Development Khaw Boon Wan’s comments on his Facebook fanpage that he had suspended future land sales under the scheme on Sunday.
Mr Khaw was replying to netizens who questioned the relevance of the DBSS.
The pilot DBSS project was announced in 2005, with private company Sim Lian Group working with the HDB to develop The Premiere in Tampines.
Propnex CEO Mohamed Ismail said: “The DBSS did play two functions then: number one, to cater to the sandwich class – those people whose income were above S$8,000 and did not qualify for BTO (build to order) flats.
“At the same time, it allowed during 2005 – when the economy was not doing well – the developers had an opportunity to build homes, with better design as well as architectural initiative being thrown in.
“But today, six years later, I think the climate and the background have totally changed”.
Analysts now say DBSS flats may not be relevant as the current priority of the government is to provide affordable housing for the masses.
While they welcomed the move, they expressed concern over the ‘sandwich class’ of home buyers who earn between S$8,000 and S$10,000.
If the DBSS were to be scrapped, some analysts believe home buyers will have to compete with lower income families for HDB flats, or look into buying executive condominiums or private homes.
Still, most believe developers will not be significantly affected.
When contacted by MediaCorp, DBSS developers United Engineers and Guthrie (DBP) declined comment.
International Property Advisor CEO Ku Swee Yong said: “Most of the developers are concentrating on private residential, commercial or industrial property anyway.
“In this category of housing, you see that most of the interest is coming from construction companies/developers because of the very tight margins that they have to work against, with HDB flats’ pricing, and with executive condominiums pricing”.
Some expect developers, especially those in the mass market sector, to gain because of spillover demand from home buyers who would otherwise purchase a DBSS flat.
It is also unclear if major developers will benefit from a boost in their share prices if DBSS land sales are stopped.
Still, big players CapitaLand and City Developments did see their stock price rise by 1.38 per cent and 1.34 per cent respectively on Monday.
The FTSE ST Real Estate index also rose 5.2 per cent on Monday.
The impact of a suspension of DBSS on the property market will be closely watched.
Responding to media queries, MND said HDB will not proceed with the sale of a site in Bendemeer Road.
SLP International research and consultancy executive director Nicholas Mak said the developers who have been involved in DBSS projects in the past have largely been the smaller developers and construction firms.
He added this will mean “a higher hurdle” for them to enter and compete in the private property market.
If the property prices are impacted at all, it is likely to be in the HDB resale market.
Mr Mak noted that in a seller’s market, DBSS prices were more likely to have been “priced to the resale market”, suggesting a certain correlation of prices.
Source : Channel NewsAsia – 4 Jul 2011