Design Build And Sell Scheme – Why DBSS Was Scraped

By on February 16, 2013

The Design Build And Sell Scheme was first introduced in 2005 as an upgraded version of HDB flats. The idea was to let private developers add a little bit of style to public housing compared to the more practical BTOs. More notable DBSS projects include The Peak at Toa Payoh, Park Central at Ang Mo Kio, City View at Boon Keng, etc.

Under this arrangement, private developers are involved with every stage of the development up to completion where it will be handed over to HDB and the town council. To add style and quality furnishing to these apartments, private developers also have to freedom to express their expertise on interior design, layout, furnishing, etc. More importantly, under this scheme, developers will have the freedom to price DBSS units at levels that they find commercially viable.

This is a huge challenge. As eligibility of DBSS buyers is restricted by the rules of income ceiling for public housing, developers have to keep prices within a range that is affordable to the mass market. And since this is public housing, comparison of prices to BTOs is unavoidable. Add that to being sandwiched between BTOs and Executive Condominiums, a middle ground has to be identified to make DBSS attractive to the “sandwich class”. Taking just this 3 areas into account, it does indeed look like a calculated and challenging task for developers taking up DBSS projects.

The Design, Build and Sell Scheme (DBSS) was introduced in 2005 to offer greater choice and wider variety to meet the housing aspirations of higher income flat buyers for better design and finishes. The involvement of the private sector enables public housing to be more responsive to the needs and aspirations of Singaporeans. – HDB

There is an argument that since HDB has the ability to launch BTO projects with architecture like The Pinnacle at Duxton that can rival any private or commercial project, why conceptualize the DBSS scheme in the first place. My guess is that HDB recognizes that private developers have the enterprise and expertise to take this concept to a new level and wanted to test it out and see how much value they can add to the public housing landscape.

DBSS is public housing like BTO

DBSS was wildly popular and achieved very impressive sales results. This was partly due to the low supply of new BTO flats that was not keeping up with demand.

Centrale 8 at Tampines

Every prospective home buyer began anticipating each DBSS launch eagerly. And there was excitement with the expected launch of a DBSS site in the mature estate of Tampines. It was Centrale 8. Although the property market was riding on a huge wave of rising property prices, home buyers were not ready for the high indicative prices of a DBSS unit. The developer announced an indicative price of $685k to $880k for a top tier five room flat at about $583 to $750psf. The high range of $880k was so alarming that netizens went to work on social media.

This backlash immediately went viral online and the mass media also caught onto the debate. At the highest indicative price, it would be priced higher than many private condominiums in the eastern estates including Tampines itself. It seemed like the developer was driven to maximize their profits instead of providing good value for DBSS which is not remotely close to a private condominium or executive condominium. As a private developer, they were entitled to be profit driven. However, this is DBSS and it quickly became clear that the public has certain expectations imposed onto DBSS developments and developers. To be fair, it must be noted that the extreme end of $880k was used most often in public discussions.

Condominiums come with facilities, security, exclusivity, privacy, etc. All valuable aspects that entice buyers to hand over their cheques. But DBSS does not come with these fancy stuff.

A few days after the initial announcement, a second announcement with the confirmed price range of $685k to $778k. The market reaction brought the top end price down by $102k. This press release added fuel to the fire burning in cyberspace. It is now being perceived that the developer could have already made a good profit from selling at $778k but attempted to squeeze out more money by trying to sell at $880k. (The assumption is that with the feverish property market, buyers will still eat it up the apartments like durians)

Sizzling hot property market in Tampines

If posh designs are what potential buyers find attractive, they can buy BTOs and spend money on lavish interior designs and still save thousands of dollars when the prices of Centrale 8 is put into perspective. Some might argue that high DBSS prices are attributed to better locations. This is reasonable as location is a major factor that affects the price of every property. But since DBSS are built on government owned land, BTOs could be built on them instead. The take up rate should be overwhelming even if a premium is charged for a central location.

The commotion and public debate concerning DBSS was of course closely monitored by the government. Housing was after all a hotly debated subject in the General Elections just a few months before. It is an issue that touches the hearts of Singaporeans.

The 13 DBSS projects are: The Premiere, City View, Park Central, Natura Loft, Parc Lumiere, The Peak, Adora Green, Centrale 8, Bedok Belvia, Lake Vista, Trevelis, Parkland Residence, Pasir Ris One

On the 2nd day of July 2011, Minister for National Development, Mr Khaw Boon Wan, announced on Facebook that all future DBSS land sales have been suspended. He writes regularly on his blog to engage the citizens here. Announcements of an indefinitely suspension followed. The show has to go on for DBSS projects in the pipeline as commitments have already been made. There is a total of 13 DBSS projects. As far as we can tell, the last project of it’s kind is Pasir Ris One.

Image Attribution: xmichh, Geroithe



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