http://www.straitstimes.com/archive/...uyers-20150205

DBSS flats still finding favour with buyers

Flats under suspended scheme still popular; resale units hold their value

Published on Feb 5, 2015 1:56 AM

By Rennie Whang


IT LOOKS like buyers are still keen on snapping up flats under the Housing Board's now suspended Design, Build and Sell Scheme (DBSS), with newer projects showing robust sales figures.

Owners hoping for capital gains down the road will be cheered as well by the profits sellers have made on the one project that has entered the resale market.

Developments that are nearing completion also seem to be well received.

Pasir Ris One, which is targeted for completion by the end of next month, is about 88 per cent sold, with only 53 units left.

The unsold balance could be due to race quotas and its distance to the Central Business District, consultants suggested.

Trivelis in Clementi, which started on Jan 28 to allow owners to collect their keys, is 97 per cent sold. Its remaining 28 flats are all three-roomers for non-Chinese buyers only.

Lake Vista in Jurong West and Parkland Residences in Upper Serangoon are believed to be fully sold and key collection is under way, said agents.

There are also signs that DBSS flats are holding their value.

The Premiere @ Tampines is the only DBSS project available on the resale market, as its owners began meeting their five-year minimum occupation period from last March.

Since then, four four-room flats and 72 five-roomers have been sold. The four-room flats sold for $570,000 to $590,000 on the secondary market, up from the original prices of $278,000 to $410,000.

The five-roomers fetched $550,000 to $726,000, up from their original $308,000 to $450,000.

While this translated into profits of over $200,000 for some owners, such gains will be harder to make in future, said R'ST Research director Ong Kah Seng.

He noted that The Premiere was launched when home prices were lower so the potential gains were larger, but other DBSS flats were launched at higher prices.

The 30 per cent mortgage servicing ratio (MSR) cap for resale flats, introduced in late 2013, will also limit demand but there should be continued profits for DBSS flats with buyers still willing to pay a premium for them, said Mr Ong.

The DBSS was suspended in 2011 following public outcry over high indicative price tags for units at Centrale 8 in Tampines. The project, which was completed last year, is believed to be fully sold.

The scheme is still under review. A Housing Board spokesman said that DBSS is "currently not a priority".

She added that HDB's priority over the past few years has been to "stabilise the housing market and help first-timer families buy their first flats through the ramped-up building programme".

As first-timer application rates have come down, the HDB has moved on to other areas, including help for members of families to live close to one another and monetisation options for seniors.

Many buyers like DBSS flats as they come as finished products, with fully fitted kitchens, wardrobes and air-con units.

"Consumers need not spend much more on renovation as these items are already in the purchase price of the flat," said ERA Realty key executive officer Eugene Lim.

PropNex chief executive Mohamed Ismail said that the DBSS scheme seems to have lost its relevance.

It has served its function of catering to the "sandwiched class" - buyers whose incomes exceeded $8,000 but who did not qualify for Build-To-Order (BTO) flats - and allowing developers to build homes when the economy was not doing well.

"But today, demand for these pricier homes has likely been dampened by the bumper fresh supply of BTO flats," he noted.

"HDB flats, such as Pinnacle@Duxton, are also well designed and conceptualised... We don't need profit-driven private developers to build overpriced public housing."

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