( Has the DBSS lost sight of its purpose? Image courtesy of Singapore Tourism Board and Mahathir Bin Mohammad. )
According to Lee Sze Teck, senior manager of research and consultancy at Dennis Wee Realty, the current median price of a DBSS unit is just $100-150 per sq ft (psf) shy of reaching the price of an EC unit.
It may seem like this figure contradicts what Singaporeans have seen in the local public housing sector this year – when sky-high asking prices for DBSS project Centrale 8 in Tampines came under fire – but Lee attributes the strong demand to location: DBSS projects are situated in mature estates close to MRT stations. The newest Clementi DBSS project Trivelis, for example, boasted prices of around $580-728 psf.
In comparison, EC prices range $501-820 psf, said Lee, citing sources like the Housing Development Board (HDB) and the Urban Redevelopment Authority. The pricings of DBSS flats have been pushing the boundaries so much that they are now not far off from the prices of new EC projects under development.”
Originally introduced in 2005 to provide a wider array of housing solutions for home seekers to choose from, the current purpose that DBSS flats serve is now somewhat unclear. The modern designs and finishes that characterise DBSS flats can be found not only in ECs, but a growing number of HDB flats as well. Take for instance the award-winning Pinnacle@Duxton.
And unlike ECs, they do not feature swimming pools and cannot be privatised after 10 years. “For example, a Clementi DBSS flat costs $650,000 and an EC unit costs $750,000, but at $100 psf more, it comes with a swimming pool,” said PropNex chief executive Mohamed Ismail. “So, with ECs, you’re getting what you pay for, although the location might not be as central.”
These industry experts feel that DBSS units have served their purposes, and the scheme should be suspended until market conditions – like a hike in prices of ECs or private property – make it necessary again.
Dennis Wee Realty data indicates the last DBSS site cost the developer $281 psf per plot ratio (ppr) – more than double the price of the first ever DBSS site ($117 psf ppr) awarded in 2006.
Does the rising DBSS price mean the time for these public housing hybrids have come to an end?
It seems unlikely, judging by the strong demand that continue to support it. The fact that DBSS projects have taken up prime spots that bank on the convenience factor means demand for such housing will remain. Factor in their limited availability (DBSS units only constitute 1% of HDB’s total stock) and the fact that unlike resale flats, DBSS units do not require cash over valuation (COV), and it seems like DBSS flats are here to stay. “The cash down payment for a DBSS unit can be lower than the COV for a resale flat, making it more attractive,” explained Lee.
Indeed, two more DBSS projects – one in Hougang and the other in Pasir Ris – have yet to be launched.
What remains to be seen is the outcome of the government’s review of the scheme. Considering that the high Centrale 8 prices came under such intense scrutiny, it is possible that the authorities might want to please the public and implement a price ceiling to forbid the scheme’s inherent inflation mechanism to push prices past a certain limit.