No takers for pricey first DBSS resale flats

SEEKING TOP DOLLAR: As of January, some residents of The Premiere @ Tampines have lived there for five years and can now sell their units, but hefty price tags are making deals unlikely.


    Mar 10, 2014

    No takers for pricey first DBSS resale flats

    THE first premium flats from the Design, Build and Sell Scheme (DBSS) have been on the resale market for months, but hefty price tags are making deals unlikely, said experts.

    As of January, some residents of The Premiere @ Tampines have lived there for five years and can now sell their units.

    Several ads have since gone up. For instance, ST Property has nearly 40 listings for units at The Premiere, with $800,000 for a five-room flat the highest asking price.

    Yet as of Friday, the Housing Board's database shows that no resale deals for that project have been approved.

    "I reckon that most buyers will not accede to the high asking prices," said R'ST Research director Ong Kah Seng.

    Experts said sellers were probably testing the market with high exploratory prices.

    "They're asking (these prices) because nobody really quite knows what the price is going to be," said SLP International Property Consultants head of research Nicholas Mak.

    Launched in 2006 to strong demand and welcoming its first families in January 2009, The Premiere was the pilot DBSS project.

    Under the scheme, public housing was designed and built by private developers, with high-end fittings such as built-in cabinets.

    "The sellers of resale DBSS units may try to push for a premium because DBSS flats are positioned as premium flats," said ERA Realty key executive officer Eugene Lim.

    But Mr Ong notes that unlike executive condominiums or private projects, DBSS flats are "non-gated" developments. "So it is unlikely that there will be many buyers willing to pay heftily for a resale unit," he said.

    The DBSS scheme was suspended in 2011 after a public outcry over expensive units.

    With new projects unlikely, sellers might hope that their rare units can fetch a higher price.

    But if buyers are rational, the suspension of the scheme should not affect resale prices, said Mr Mak. Instead, resale prices should be based on attributes such as location, he said.

    What about the premium fittings? Century21 chief executive officer Ku Swee Yong thinks this could backfire. A typical five-room DBSS unit will have less "interior usable floor area" due to its large balcony and bay windows in the bedrooms, so buyers might prefer a normal flat.

    Mr Ong noted that resale buyers tend to renovate their flats, which would "reduce the selling point" of fixtures.

    Tighter home loan rules introduced in August also make it hard for buyers to afford high prices.

    Given all this, Mr Ku thinks that sellers of The Premiere units should refer to the median prices of units in Tampines instead.

    In the last quarter of last year, the median price of a five-room flat in Tampines was $543,000, meaning that half of such flats went for at least that much.