Wednesday, July 6, 2011

Govt halts DBSS land sales as it reviews scheme

THE sale of land for Design, Build and Sell Scheme (DBSS) projects has been put on hold while the Government carries out a review, said National Development Minister Khaw Boon Wan.

But developers which clinched sites last year will launch their projects as scheduled in the next few months, he added, noting that 'these are old tenders beyond my control'.

Mr Khaw made these points on his official Facebook page over the weekend, in response to a member of the public who called for the scheme to be scrapped in the wake of high asking prices at a Tampines project called Centrale 8.

The developer, Sim Lian Group, initially estimated prices at $880,000 for five-room units, later revising them to $778,000 after a public uproar.

Yesterday, the Ministry of National Development (MND) said that pending the results of the review, the Housing Board would not proceed with the sale of a DBSS site in Bendemeer slated for later this month.

However, the sale of a site in Sengkang - expected to yield 790 units - will still proceed, with a July 20 deadline.

DBSS was rolled out six years ago to give private developers a chance to participate in the public housing market and to introduce more building and design innovations in such housing.

Since then, 13 sites have been awarded and 5,500 flats have been built and sold.

DBSS flats make up less than 1 per cent of the total HDB stock.

Analysts say the current review is timely, given the changing housing landscape. Recent flash estimates from HDB revealed that resale flat prices jumped 2.9 per cent from the first quarter of this year, while data from major real-estate firms put the median cash premium paid above a flat's valuation at about $30,000, an almost 50 per cent increase.

PropNex chief executive Mohamed Ismail noted that when DBSS kicked off in 2005, the market was in the doldrums and there was a surplus of public housing.

'The scenario now has changed with soaring prices,' he said, adding that DBSS flats are in demand because most are in mature estates or central locations.

Mr Colin Tan, Chesterton Suntec International's research and consultancy director, said that if the objectives are to inject variety and engage the private sector and smaller contractors, 'then perhaps the sites should be in newer towns which are less in demand'.

Dennis Wee Group director Dennis Wee said that if a revision of the monthly household income cap is being studied for public housing, then it makes sense to put DBSS on hold.

'Moreover, eligible flat buyers for these units are a smaller group compared with the main supply,' he said.

Currently, the income ceiling for build-to-order (BTO) flats is up to $8,000, while that for DBSS and executive condominiums is up to $10,000.

Meanwhile, DBSS developers with projects in the pipeline say it is business as usual for them.

The launch of the 488-unit Belvia in Bedok is still on track to take place this year, said a spokesman for CEL Development.

'We've already submitted the necessary documents; the prices have yet to be confirmed and will depend on prevailing market prices then,' she said.

Mr Lim Yew Soon, managing director of EL Development, which clinched a DBSS plot in Clementi in March, said it would be to its advantage to 'sell flats as soon as possible to ease cashflow'.

Although he expects the top price to cross $800,000, it would not hit the peaks that sparked the Centrale 8 furore.

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