Though the Design, Build and Sell Scheme (DBSS) has been suspended since 2011, its premium flats continue to intrigue us. Are they worth paying premium dollar for?
Though the Design, Build and Sell Scheme (DBSS) has been suspended since 2011, its premium flats continue to intrigue us. Are they worth paying premium dollar for?
Launched by the Housing Board (HDB) in 2005, the Design, Build and Sell Scheme (DBSS) was designed to bridge the gap between private and public housing.
This satisfied a class of buyers who wanted a more luxe home than the usual Build-To-Order (BTO) flats, but may not have been able to afford (or want to pay for) private housing or HDB’s executive condominiums. HDB thus roped in private developers such as Sing Haiyi Group, Kay Lim Holdings and EL Development to build and sell these premium flats.
Despite their heftier price tags, the allure of getting a new flat in an established neighbourhood, subsidies from the HDB, paying less upfront cash and, of course, bragging rights for living in the swankiest flats in the area, drove up demand for DBSS flats. Unfortunately, several DBSS projects have since had bad press.
Here’s the issue: although the DBSS is initiated by the HDB, buyers are actually buying their property from these private developers. Technically, the HDB is not liable for such issues, though angry buyers felt differently.
Make no mistake – DBSS flats are HDB flats after all, and buyers are still subject to HDB rules such as a minimum occupation period (MOP) of five years before they can sell and cash in on their asset. It’s been 12 years and there has been a total of 13 DBSS projects since the scheme’s inception. With more homeowners meeting their five-year MOP, more such flats aew flooding the open market. But do DBSS flats make good investments? Should you buy a resale DBSS flat? Consider these case studies.
The Premiere.
Singapore’s first DBSS project was launched in Tampines in 2006. Prices for a new five-room flat at The Premiere were between $308,000 and $450,000 – a steal, compared to its new neighbours at Centrale 8, just a street away.
Completed in 2008, The Premiere’s buyers predictably made a good profit. Most recently from December 2016 to February 2017, five-room flats sized between 1,162sqf to 1,227sqf fetched between $670,000 to $758,000 on the open market. Here, you can enjoy new amenities such as the new Tampines Hub and Tampines Eco Green, and well-loved malls like Century Square and Tampines Mall.
Centrale 8.
Sited right next to The Premiere, Centrale 8’s original price of $880,000 for a five-roomer famously pushed the halt button on the DBSS programme. Prices for its three- to five-room flats were eventually lowered to between $389,000 and $778,000.
In 2014, residents of the 708- unit project who were upset over the numerous defects presented an angry petition letter to developer Sim Lian Group and their Member of Parliament, Finance Minister Heng Swee Keat.
They wanted to extend their one-year Defects Liability Period to ensure that the developer would fix all issues (including some extreme cases like a burst pipe), or pay a compensation fee for defects “that cannot be reasonably rectified”. Mr Heng even had to oversee a special taskforce to handle their concerns.
Limited new units are still being marketed by the developer on online property sites, starting from $711,000 for a 1,163sqf five-roomer. We also found a rental ad for a fully furnished master bedroom at $1,000 per month.
City View.
Last August, a 1,280sqf five-roomer at City View, Singapore’s second DBSS project, made headlines (and the sales record then) when it sold for $1.1 million. To date, six units have already hit the $1-million mark in the estate.
Launched in 2008, prices varied from $349,000 to $394,000 for three-room flats; $523,000 to $597,000 for four-room flats; and $536,000 to $727,000 for fiveroom flats. It is estimated that the happy owners will reap a profit margin ranging from 35 to 59 percent. Located on the city fringes and near Boon Keng MRT station, some units boast panoramic views of the sea and even of fireworks from the National Day Parade held at Sports Hub. Buoyed by their neighbours’ success, more City View owners have put their units up for sale, including one millionaire hopeful who priced his 36th-floor unit at $1.1 million on ST Property’s website.
Park Central.
Park Central’s coveted location at Ang Mo Kio attracted 3,000 people on its first day of launch back in 2008. The mature estate offers amenities like MRT stations, established primary schools and shopping malls like AMK Hub, Jubilee Square and Djitsun Mall. Completed in 2011, Singapore’s third DBSS project sold four-roomers at $400,000 to $500,000, and five-roomers at $600,000 to $700,000.
Developed by United Engineers, the 578- unit project hit its five-year MOP in July 2016. To date, 18 flats have changed hands, ranging from $688,000 for a 968sqf four-roomer, to $980,000 for a 1,291sqf five-roomer. Industry watchers expect that future units may cross the million-dollar mark, though the highest asking price we’ve seen so far is a recent five-roomer’s ad for $990,000.
Pasir Ris One.
Singapore’s last DBSS project offered before the scheme’s suspension, Pasir Ris One is a 447-unit collaboration between property developers Sing Haiyi Group and Kay Lim Holdings. The flats cost between $390,000 for a three-roomer, and $770,000 for a five-roomer.
The project’s awkward design flaws drew ire from homeowners, who received their keys in 2015. Complaints poured in fast and furious about the corridors that measured just 1.2m wide, workmanship defects like popping tiles, and cracks on window panes. On Propertyguru.com.sg, several four-roomed units sold directly by the developer are still available. The 926sqf flats ranged from $565,000 to $619,200. One owner also put up a master room and a common room for rent at $2,488.
Natura Loft.
A five-room flat at Bishan’s Natura Loft is Singapore’s most expensive HDB flat – for now.
One of just 12 penthouse units in the sleek three-block, 480-unit project, the five-year-old flat was sold for a cool $1.18 million in January 2017. Besides its breezy views, the 1,291sqf unit – similar to older HDB flats – is also larger than typical fiveroomers today, which are about 1,184sqf. Its coveted location at Bishan is served by Marymount MRT station and Bishan MRT station, Junction 8 mall and prestigious schools like Catholic High School and Raffles Institution. Still, it worked out to be over $900psf – more expensive than some condominium units in the neighbourhood, which recently sold for as low as $850psf.
Natura Loft flats were originally priced at $465,000 to $586,000 for its 1,022sqf four-room flats, and $590,000 to $739,000 for five-room flats. Some 30 flats have already been resold since last September, ranging from $700,000 to $818,000 for the four-roomers, and $830,000 to $1.18 million for the five-roomers.
Weighing out the factors.
DBSS flats have certainly made several lucky homeowners instant millionaires, but bear in mind that not every DBSS flat is created equal. Only super premium ones – on a very high floor, with amazing views, nice renovation, great location and facing, among some factors – have hit the jackpot so far.
If you’d bought your DBSS flat brand new at a subsidised price and with HDB grants, you can definitely enjoy a tidy profit when you resell it – as with any brand new HDB flat. But you also paid more for it, compared to a regular BTO flat. Whether or not your investment will net you a higher capital gain than a cheaper BTO flat, will depend on your unit’s own merits and market sentiments. If you’re planning to buy a resale DBSS flat, you must accept that you will be paying top dollar. Do consider if you can ever resell it at a profit – or will you possibly incur a loss? (Seriously, how many people will be willing to splurge $1 million on an ageing HDB flat?)
If you’re thinking of making some of that dough back through rental income, do note that your DBSS flat is subject to HDB’s restrictions and you can’t lease out the whole unit until the flat fulfils its fiveyear MOP and you’ve obtained permission from HDB to do so, though individual room rentals are fine – provided you continue to live in your home.
Most tenants, unlike buyers, pay less attention to the flat’s exterior. Your DBSS flat will not likely command any, or much, higher rental compared to another equally good HDB flat just because it has a fancier name and you paid more for it. For the same amount that you’re shelling out, you may fetch the same rental yield – and get instant rental income – if you buy an older private property instead.
Finally, also consider changing trends and expectations. SLP International Property Consultants head of research Nicholas Mak shared with The Straits Times: “Right now, DBSS flats look good, and look different. But over time, as more HDB flats come with private condo-like facades, DBSS flats are not going to stand out anymore.” We couldn’t agree more. By the way, did you know that Singapore’s most iconic HDB estate, The Pinnacle@Duxton, is not a DBSS project? (It was built before the scheme was rolled out.) That didn’t stop 10 units (to date) from selling past the $1-million mark, with the highest priced at $1.12 million.
At the end of the day, whether you are buying a regular BTO, resale, or DBSS flat, you are buying a home, not just a house. There’s nothing wrong with paying more for a flat you really like, as it’s a personal choice. As long as you can afford it and are willing to splurge on a nicer flat, that’s all that matters.
Text STELLA THNG Photography WINSTON CHUANG Art Direction YEW XIN YI.
