Is DBSS pricing justified?
Despite widespread criticism that Sim Lian Group's latest Design, Build and Sell Scheme (DBSS) project in Tampines is too expensive for public housing, the project has been two times oversubscribed. The 708-unit Centrale 8 project in Tampines saw 431 applications by its deadline on the 21st of June, according to an article on PropertyGuru.
Centrale 8 made headlines recently after its five-room flats were listed at a whopping S$880,000, triggering a public outcry that the price tag is similar to that of an executive condominium (EC).
One could assume that a good proportion of the buyers applied for the flats merely out of necessity — young couples who need to settle down as soon as possible, for instance. They may not feel the prices are justified but settle for the expensive flats because they have to and can afford to do so.
Still, the oversubscription rate seems to indicate that a fair number of Singaporeans may feel that the prices are indeed justified, perhaps because of the project's location, facilities and design.
On the other hand, from a purely technical and logical standpoint, one could also present a sound argument as to why the prices are unjustified.
Tejaswi Chunduri, a real estate analyst at PropertyGuru, explained that DBSS and Build-To-Order (BTO) flats both fall under public housing provided by the government "but are targeted at different classes of home buyers".
"To be eligible to buy a DBSS flat, your monthly household income should fall between S$8,000 to S$10,000 (also known as the sandwiched class)."
She added, "DBSS flats offer condominium-style fittings, layouts and facilities but are subject to public housing rules, such as the household income ceiling, ethnic quotas and a five-year minimum occupation period. However, facilities like swimming pools and tennis courts are not provided, as they are too expensive to maintain."
As such, it is easy to see why so many oppose the exorbitant prices of the flats. Since DBSS projects do not enjoy the same facilities condominiums do and are also smaller than many flats in mature estates such as Tampines, it would not be reasonable to price the units so highly.
But now that the price for a five-room flat at Centrale 8 has been reduced from S$880,000 to S$778,000, will people still be dissatisfied?
Sim Lian Group said that the S$880,000 price tag for the five-room DBSS flats was only an indicative price range "and would not be the final sale price for the respective types of flat units".
"It is regrettable that during the application period, the media and members of the public did not take note of our repeated public emphasis that the price range which we had announced was only an indicative price range," the developer stated.
Analysts stress that DBSS flats will continue to lure buyers, if they are priced sensibly.
Keeping in mind that, facilities aside, DBSS flats are smaller than most other types of flats in mature estates like Tampines, S$778,000 for a five-room unit may still not be "sensible" to most.
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