‘Only buy a property when you can afford it’

The decision by National Development Minister Khaw Boon Wan to suspend future land sales under the Design, Build and Sell Scheme (DBSS) will be welcomed by all those who think that HDB land should be for the masses and not for the select few.

In January, I had called on the Housing & Development Board to get out of the DBSS programme when it should be busy catering to the thousands clamouring for more affordable housing.

Finally, the Ministry of National Development appears to be seeing the light and said in a statement yesterday that it is reviewing the scheme.

In my view, it should abandon the scheme altogether and concentrate on the task the HDB was originally set up for -building affordable abodes for the man in the street.

In fact, perhaps, the Government should also stop building Executive Condominiums – after all there is no dearth of private developers here.

The suspension of land sales for DBSS comes in the wake of the widespread criticism of the high prices for DBSS units, which are built by private developers who bid for the land from the HDB. These DBSS units come with more luxurious fittings than the normal HDB flats but they still fall under the restrictions and conditions of the HDB. The conditions include combined monthly household incomes of between S$8,000 and S$10,000.

When the public howled at the original asking price of S$750 per sq ft for Centrale 8 in Tampines, the developers Sim Lian Group slashed prices by up to S$100,000 an apartment. The Central 8 units are no larger than normal HDB flats which go for half the price.

Developers are certainly making healthy profits for DBSS projects: According to a recent media statement by developers Hoi Hup Group and the Sunway Group, their net profit margins for DBSS projects were between 15 and 18 per cent.

What is also grating to some is that prospective buyers of DBSS units are also eligible for CPF housing grants. Shouldn’t such public funding be reserved for those more deserving?

It is also good to know that the HDB is ramping up the Build To Order (BTO) programme with 25,000 units slated for this year. The HDB should remain focused on seeing that all the time-tables are met. Ramping up the supply of BTO flats should see the cash over valuation in the resale market drop. There are many people who claim they cannot afford private properties and, therefore, need the Government’s help through schemes such as DBSS or ECs.

To them, I’d say there is nothing wrong with the normal HDB flats (I live in one and find it more than comfortable). Only buy a private property when you can afford it.

Source : Today – 5 Jul 2011

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