Wednesday, September 19, 2012

Over 1,000 DBSS flats still unsold since scheme's suspension


Experts say demand for pricier DBSS homes dampened by bumper fresh supply of BTO flats

The Straits Times
September 17, 2012

MORE than 1,000 Design, Build and Sell Scheme (DBSS) flats have been sitting unsold since the scheme was suspended last year.

Experts say demand for these pricier homes has likely been dampened by the bumper fresh supply of build-to-order (BTO) flats since both have a monthly income ceiling of $10,000.

Six DBSS launches have been rolled out since the 806-unit Adora Green in Yishun - now fully sold out - entered the market in February last year.

Some DBSS projects have similarly enjoyed healthy sales.

EL Development's 888-unit Trivelis in Clementi is 90 per cent sold, while CEL Development's 488-unit Belvia in Bedok has found buyers for 400 units.

But other projects have seen more modest sales. Pasir Ris One, for instance, has sold only about a quarter of its 447 units, while 195 units are still up for grabs at 680-unit Parkland Residences along Upper Serangoon Road.

Sim Lian Group declined to comment on sales figures for 708-unit Centrale 8 in Tampines, but agents say more than 60 per cent of the project has been sold. There are also still 206 flats at 682-unit Lake Vista @ Yuan Ching in Jurong up for grabs.

DBSS flats are a hybrid form of public housing. Designed and sold by private developers, they typically come with fittings and better finishings than standard BTO flats.

However, the scheme was suspended in July last year following a public outcry over a Centrale 8 DBSS unit bearing an initial price tag of $880,000. This was subsequently lowered, with the priciest unit selling at $778,000.

The National Development Ministry said last week that it was not rushing to finish the scheme's review as its current priority was to ramp up supply of BTO flats and executive condominiums (ECs).

Its reply came in response to a question from MP Ang Hin Kee on on whether the ministry had completed the review and if the review was looking into how it would impact owners of DBSS flats.

Experts say that the ramp up in BTO launches and the slew of new ECs have placed further pressure on this hybrid segment as they all target primarily first-time buyers.

They add that DBSS projects launched earlier and in areas without a huge ramp up of housing supply have typically fared better.

ERA Realty key executive officer Eugene Lim noted that with BTO flats and ECs cannibalising the demand for DBSS flats, developers will now take longer to move units.

"DBSS flats do offer buyers an alternative as they are priced between BTO flats and ECs. But because of the many alternatives that buyers have now, they are no longer as in demand," he said.

If DBSS flats cost $600,000 to $700,000 in an estate, EC units would cost about $800,000, while private condo units might fetch $1 million, Mr Lim added.

Mr Lee Sze Teck, Dennis Wee Group's senior manager of training, research and consultancy, said a Clementi BTO launch near a DBSS site in January that upset some buyers could also have cast a shadow on the DBSS segment. BTO flats are priced cheaper, and with a flood of BTO launches, buyers are unsure if they should commit to a DBSS unit.

Managing director of developer EL Development, Mr Lim Yew Soon, emphasised that location was key to whether a DBSS project fared well.

"I think there is still a need for DBSS flats as it allows for a buyer to pay a slight premium for a location that he wants. If everything is based on BTO, then getting a flat is always like a lucky draw.

"I might still bid for a DBSS site in the future, but it depends very much on the location of the site - if it is in a mature estate or near an MRT station," he said.

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