Profit margins for DBSS developers 'look high'

[rattydrama]

very strange...how come the building cost is at 200psf for all the projects? Can anyone explain why?

[Jadey]

i dun see it tat way....HDB generous to let pte developers earn so much? den HDB shd set a min bid price? or u mean developers got the land for too low?

HDB eevr complain they losing $$ meh? its more like ppl r complaining y HDB priced bto price so high so they goto justify ....so i reply u HDB include the land valuation determined by SLA and claimed they making a loss

tats y i mentioned liao...sell HDB price at cost price no problem but where is the money gona come from to build the new infrastructure, new schools, new roads, new amenities etc? all the residents chip in to build too?

Weather HDB is dumb or generous, it up to you to decide. I am only interest to know why HDB doesn't want to DBSS themselves when there is such good profit to make from DBSS. Or if you want to look at it another way, why let private developer make money at the expense of Singaporeans?

As a Singaporeans, of course I have the right to ask such question weather it is election or not.

http://www.channelnewsasia.com/stori...015349/1/.html

[Jadey]

Then SLA also allow LVS and Genting to make so much money? What about offices? Like Suntec. They also make so much money.

Even some chicken rice seller is making so much money. So should URA continue to rent the shop to them since they are making so much money? Or you think Government should ask them to sell chicken rice at cost price. And you earn your salary at $350 per month. Just like a communist country.

You definitely need to understand the meaning of PUBLIC HOUSING and the role of HDB before you ask me those questions

[august]

Free market as in developers can bid for land at their price. And buyers can choose to buy at their price.

If you talking about defer completion, then it is policies. That is a given. Like a project has to TOP within a period, the plot ratio etc..

And lastly, no doesn't mean never. No bank has ever failed doesn't mean banks will never fail.

the nature of public housing is not where buyers can choose to buy or not, it is a necessity and the issue is affordability

govt policies designed to help developers (e.g. extending legal completion during the financial crisis, withdrawing GLS etc) makes a mockery of free mkt

lastly, just because the pap govt or Khaw keeps stressing it is a free mkt doesnt mean it is free LOL

[thomastansb]

I know. From HDB website, it states - Providing Affordable, Quality Homes.

BTO only cost 250 to 300k on average for a 4 bedrooms. Or 200k for a 3 bedrooms. If that is not affordable, I don't know what is.

Maybe you still live in an era where you want chicken rice at 50 cents and HDB flat at $15k.

You definitely need to understand the meaning of PUBLIC HOUSING and the role of HDB before you ask me those questions

[thomastansb]

You are right. Affordability. 3 bedroom only 200k. Spread out 30 years, you pay like $600-700 a month? Not affordable? Well, there are always 2 bedrooms also.

the nature of public housing is not where buyers can choose to buy or not, it is a necessity and the issue is affordability

govt policies designed to help developers (e.g. extending legal completion during the financial crisis, withdrawing GLS etc) makes a mockery of free mkt

lastly, just because the pap govt or Khaw keeps stressing it is a free mkt doesnt mean it is free LOL

[yaozong7]

I know. From HDB website, it states - Providing Affordable, Quality Homes.

BTO only cost 250 to 300k on average for a 4 bedrooms. Or 200k for a 3 bedrooms. If that is not affordable, I don't know what is.

Maybe you still live in an era where you want chicken rice at 50 cents and HDB flat at $15k.

But Jadey is talking about why HDB allows DBSS, when there's gd money to be made, not about the normal BTO right?

Putting on my Enron evil accountant hat, I think it's hard for HDB to price the BTO too high, for fear of public outcry. MBT's solution then is to allow DBSS (small segment) to inflate overall HDB prices & also underbuild BTO flats at same time.

DBSS acts as a catalyst, together with underbuilding BTO flats, to increase the overall prices of HDB flat, since HDB BTOs are pegged to open market prices.

Govt dont mind leting evil developers earn a little from DBSS (small segment), while overall HDB prices rise substantially (big segment) all the way into the mythical reserves.....

[Jadey]

I know. From HDB website, it states - Providing Affordable, Quality Homes.

BTO only cost 250 to 300k on average for a 4 bedrooms. Or 200k for a 3 bedrooms. If that is not affordable, I don't know what is.

Maybe you still live in an era where you want chicken rice at 50 cents and HDB flat at $15k.

you might have read it, but weather or not you understand what you read , the role of HDB and public housing, that I am not too sure.

[SpinCity]

But Jadey is talking about why HDB allows DBSS, when there's gd money to be made, not about the normal BTO right?

Putting on my Enron evil accountant hat, I think it's hard for HDB to price the BTO too high, for fear of public outcry. MBT's solution then is to allow DBSS (small segment) to inflate overall HDB prices & also underbuild BTO flats at same time.

DBSS acts as a catalyst, together with underbuilding BTO flats, to increase the overall prices of HDB flat, since HDB BTOs are pegged to open market prices.

Govt dont mind leting evil developers earn a little from DBSS (small segment), while overall HDB prices rise substantially (big segment) all the way into the mythical reserves.....

Hahaha, then do you mind putting on the evil accountant hat one more time to conclude the mythical reserves account?

[thomastansb]

Good money can be made anywhere. So should we stop commercial developers from buying lands to offices? What about Kopitiam? Food is a necessity but they earn so much. Stop them?

My brother bought boon keng DBSS. He don't want BTO because he wants everything furnished. And slightly nicer than normal HDB. I told him not worth it but he still went ahead.

My point is simple. If it is so ex, if it is so disgruntling, why are DBSS over-subscribed and so wildly popular? Obviously there is a market for it. If you don't want, other people want. Unless we have 0 sales for tampines DBSS, then I think there is a market for it.

I have one conclusion. It is those people who earn too little to afford DBSS but yet, don't like HDB. According to Mr. KBW, 33% rejected HDB flats despite having a chance to choose. Fussy and cheapo.

I agree with you on the underbuilding of BTO though and also agree to scrap DBSS. But we might be wrong. There are people who bought DBSS and are happy. My bro is one at least. Balcony with fantastic seaview and MRT below. So what is not good for you/me might be a fantastic choice for another. Why should we disallow others from buying if there is a market for it?

But Jadey is talking about why HDB allows DBSS, when there's gd money to be made, not about the normal BTO right?

Putting on my Enron evil accountant hat, I think it's hard for HDB to price the BTO too high, for fear of public outcry. MBT's solution then is to allow DBSS (small segment) to inflate overall HDB prices & also underbuild BTO flats at same time.

DBSS acts as a catalyst, together with underbuilding BTO flats, to increase the overall prices of HDB flat, since HDB BTOs are pegged to open market prices.

Govt dont mind leting evil developers earn a little from DBSS (small segment), while overall HDB prices rise substantially (big segment) all the way into the mythical reserves.....

[thomastansb]

So you care to explain?

you might have read it, but weather or not you understand what you read , the role of HDB and public housing, that I am not too sure.

[yaozong7]

Hahaha, then do you mind putting on the evil accountant hat one more time to conclude the mythical reserves account?

Aiyoh how to work out the "mythical reserves account" easily?

Think need "50 man-years" & all the President's scholars in the present & past cabinets to determine the amount leh...

[august]

You are right. Affordability. 3 bedroom only 200k. Spread out 30 years, you pay like $600-700 a month? Not affordable? Well, there are always 2 bedrooms also.

30 yrs is not affordable liao
Should be 20 yrs.

[SpinCity]

Also, you forgot to include developer's risk. Let's say, they bid a high price for the land during good times. Then downturn suddenly come. And they are forced to sell at a loss because under the law, they have to complete it within a certain time frame.

So it is a free market, with supply vs demand and risk vs returns.

And do you know the price of DBSS vs HDB?

it is not a free market for DBSS as 1) housing grant is provide 2) supply is control by HDB and 3) financing scheme is controlled by HDB

It is less risky for private developers for DBSS as the supply/demand equilibrium is artificially twisted by a visible hand with the mystical reserve which belongs to all Singaporeans

By all means developers can bid for private housing lands at crazy price and launch prices that are even crazier as they wish

But for DBSS which is still under the public housing category, profit margin shall be controlled just like utilities

[SpinCity]

30 yrs is not affordable liao
Should be 20 yrs.

come on, it is very affordable when compared with other countries and SG's income level
200K cannot even buy you honda civic, which is like 3m*4m aircon-ed, carpeted space?

[phantom_opera]

Only one comment from me, those who bought overpriced DBSS flat e.g. Sim Lian Centrale 8 is plain foolish or they are just too rich to care about 100k extra margin made by Sim Lian.

You buy a 4rm HDB from Sim Lian @ Tampines, 84sqm, 10sqm is balcony, 4sqm is air con ledge, price is 5XXk even after deducting 30k grant

In a normal BTO project, there is no balcony, air con ledge probably only 1-2sqm !!!

How come nobody wrote to press to complain about that?

[thomastansb]

What has the number of years got to do with affordability?

30 yrs is not affordable liao
Should be 20 yrs.

[thomastansb]

Less riskier still got risk. Like now, release few thousand HDB every month. You tell me this is control? Last time, release few thousand in 1 year. So this is one good example of risk that I am talking about.

it is not a free market for DBSS as 1) housing grant is provide 2) supply is control by HDB and 3) financing scheme is controlled by HDB

It is less risky for private developers for DBSS as the supply/demand equilibrium is artificially twisted by a visible hand with the mystical reserve which belongs to all Singaporeans

By all means developers can bid for private housing lands at crazy price and launch prices that are even crazier as they wish

But for DBSS which is still under the public housing category, profit margin shall be controlled just like utilities

[thomastansb]

Well, maybe they like the place? I am definitely against DBSS but they weigh the options, they like the place, they like the full furnishing concept, they have to pay for it.

Btw, I also think it is foolish to buy Maserati or Rolls Royce. Can buy a few properties already - fully paid. But who are we to stop them from selling? If it is too ex, don't buy. But the rich can easily afford. I have no issue with that. Unlike those who want to buy DBSS, cannot afford and start making so much noise.

Only one comment from me, those who bought overpriced DBSS flat e.g. Sim Lian Centrale 8 is plain foolish or they are just too rich to care about 100k extra margin made by Sim Lian.

You buy a 4rm HDB from Sim Lian @ Tampines, 84sqm, 10sqm is balcony, 4sqm is air con ledge, price is 5XXk even after deducting 30k grant

In a normal BTO project, there is no balcony, air con ledge probably only 1-2sqm !!!

How come nobody wrote to press to complain about that?

[yaozong7]

Good money can be made anywhere. So should we stop commercial developers from buying lands to offices? What about Kopitiam? Food is a necessity but they earn so much. Stop them?

My brother bought boon keng DBSS. He don't want BTO because he wants everything furnished. And slightly nicer than normal HDB. I told him not worth it but he still went ahead.

My point is simple. If it is so ex, if it is so disgruntling, why are DBSS over-subscribed and so wildly popular? Obviously there is a market for it. If you don't want, other people want. Unless we have 0 sales for tampines DBSS, then I think there is a market for it.

I have one conclusion. It is those people who earn too little to afford DBSS but yet, don't like HDB. According to Mr. KBW, 33% rejected HDB flats despite having a chance to choose. Fussy and cheapo.

I agree with you on the underbuilding of BTO though and also agree to scrap DBSS. But we might be wrong. There are people who bought DBSS and are happy. My bro is one at least. Balcony with fantastic seaview and MRT below. So what is not good for you/me might be a fantastic choice for another. Why should we disallow others from buying if there is a market for it?

Err.....I try to explain again succintly. Jadey is asking:- why should the Govt let private developers massively profit from public housing at the expense of the citizens, and inflating HDB prices in the process?

Instead of building the flats themselves at subsidized prices to benefit citizens?

I get your point on the demand for DBSS. But could it be more a case of people buying the location rather than the fabled furnishing? Some may also be frustrated with their repeated failures in BTO market.

I might be wrong, but I think that given the same location, there will be greater demand for BTO rather than DBSS. I think the demand for DBSS flats is a reflection of their prime location, rather than validation of the DBSS model itself.

Buyers who see themselves buying a LT home rather than an investment, are hence willing to pay the additional premium, though they would prefer the cheaper BTO option of course.

[SpinCity]

Less riskier still got risk. Like now, release few thousand HDB every month. You tell me this is control? Last time, release few thousand in 1 year. So this is one good example of risk that I am talking about.

Of course it is controlled as 1) DBSS land supply only comes from HDB and 2) demand is artificially inflated due to housing grant and financing scheme

The risk is greatly mitigated by the reasons above, and for the same reason, profit margin shall be controlled to a reasonable level, just like utilities

By allowing developers to decide freely to participate DBSS or not does not make it a free market

[yaozong7]

What has the number of years got to do with affordability?

Humm......we seem to be getting into GE territory! haha I reserve my comments on this till Aug'11.... hahaha

[phantom_opera]

Actually the only thing I complained is oversized balcony and AC ledge but I agree that you must pay $$$ for prime location near MRT (e.g. DBSS Tampines, Simei are definitely near enough). In fact, some old HDBs near EWL are asking 80k COV now !!! Due to high price of COE + MRT expansion, people are now willing to pay higher and higher COV for flats near MRT.

[SpinCity]

Actually the only thing I complained is oversized balcony and AC ledge but I agree that you must pay $$$ for prime location near MRT (e.g. DBSS Tampines, Simei are definitely near enough). In fact, some old HDBs near EWL are asking 80k COV now !!! Due to high price of COE + MRT expansion, people are now willing to pay higher and higher COV for flats near MRT.

I guess the question is that, for the same DBSS Tamp site, why can't they do BOT even at a higher than normal BOT price? Wouldn't that create more utility for the public rather than for the developer?

[thomastansb]

well, I am against DBSS. Yup, there are some who can't get BTO and move to DBSS instead. I am sure there are a handful.

Anyway, I am also disgusted about the fussiness of people. 33% rejected BTO flat.

Err.....I try to explain again succintly. Jadey is asking:- why should the Govt let private developers massively profit from public housing at the expense of the citizens, and inflating HDB prices in the process?

Instead of building the flats themselves at subsidized prices to benefit citizens?

I get your point on the demand for DBSS. But could it be more a case of people buying the location rather than the fabled furnishing? Some may also be frustrated with their repeated failures in BTO market.

I might be wrong, but I think that given the same location, there will be greater demand for BTO rather than DBSS. I think the demand for DBSS flats is a reflection of their prime location, rather than validation of the DBSS model itself.

Buyers who see themselves buying a LT home rather than an investment, are hence willing to pay the additional premium, though they would prefer the cheaper BTO option of course.

[linchong84]

Wah.. this kind of topic can draw so much attention from forumers here huh hahaha..

For all you forgetful fellows, pls refer to KBW's quote of the year "DBSS is not HDB".. So, pls stop linking HDB to DBSS, or whether it is govt or HDB's job to ensure DBSS is cheap.. As for whether it is morally right for govt to to do is another matter..

And for people who really think DBSS locations are wonderful, that's all rubbish.. Their next few launches are going to happen in Hougang and Sengkang.. Both are >1km away from the MRT.. The toa payoh one is directly in between TPY and Bradell MRT stations, not beside.. bishan one is somewhere near cat high which is >1km from MRT.. For tamp one, it is currently 1km away from the present Tamp MRT station. Even after DT line 3 is up, the station is still 400-500m away.. AMK one is also 400-500m away.. I'm not trying to diss the locations, but my point is why do they deserve privatisation when they have nothing special except oversized balconies and aircon ledges?? Big aircon ledges very lihai meh?

[phantom_opera]

I guess the question is that, for the same DBSS Tamp site, why can't they do BOT even at a higher than normal BOT price? Wouldn't that create more utility for the public rather than for the developer?

Recently there was one Tampines BTO, further away from MRT but much cheaper about 300k ... and no balcony with small AC ledge

DBSS Tampines costs 250k more and you get 16% unusable space ha ha ha

[SpinCity]

Wah.. this kind of topic can draw so much attention from forumers here huh hahaha..

For all you forgetful fellows, pls refer to KBW's quote of the year "DBSS is not HDB".. So, pls stop linking HDB to DBSS, or whether it is govt or HDB's job to ensure DBSS is cheap.. As for whether it is morally right for govt to to do is another matter..

And for people who really think DBSS locations are wonderful, that's all rubbish.. Their next few launches are going to happen in Hougang and Sengkang.. Both are >1km away from the MRT.. The toa payoh one is directly in between TPY and Bradell MRT stations, not beside.. bishan one is somewhere near cat high which is >1km from MRT.. For tamp one, it is currently 1km away from the present Tamp MRT station. Even after DT line 3 is up, the station is still 400-500m away.. AMK one is also 400-500m away.. I'm not trying to diss the locations, but my point is why do they deserve privatisation when they have nothing special except oversized balconies and aircon ledges?? Big aircon ledges very lihai meh?

To me, the statement of "DBSS is not HDB" is similar to an ancient Chinese sophism of "White horse is not horse"

[SpinCity]

Recently there was one Tampines BTO, further away from MRT but much cheaper about 300k ... and no balcony with small AC ledge

DBSS Tampines costs 250k more and you get 16% unusable space ha ha ha

The difference between the Tampines BTO and DBSS is that :
those DBSS buyers get a big balcony and developer earns millions

[devilplate]

You definitely need to understand the meaning of PUBLIC HOUSING and the role of HDB before you ask me those questions

See...become post election debate