Interesting to be back blogging. Just a simple and useful tool to keep in touch with friends, family and clients.
The recent displeasure with the prices of the DBSS (Design, Build and Sell Scheme) project in Tampines by Sim Lian Group, Centrale 8, has caused our recently appointed Minister for National Development Khaw Boon Wan to state that DBSS flats are not HDB flats.
http://www.temasekreview.com/2011/06/19/khaw-boon-wan-dbss-is-not-hdb/
Let me then make it clear as to why I disagree with this notion.
The DBSS scheme was designed by his predecessor, Mah Bow Tan, to boost building activity during the perceived housing and construction slump in and around 2006. The pilot DBSS project was The Premiere in Tampines. It was awarded, ironically, to Sim Lian in January 2006. This was at a time when our housing prices were still affordable and we have yet to open the floodgates to the mass of foreigners that would flood our beloved Singapore for the next few years.
Let's get this straight, DBSS is still a HDB flat. We buy it under HDB schemes, we cannot rent it out immediately and have to fulfill our minimum occupation period (MOP) and we cannot resell it to foreigners. When the MOP is up and the owners can sell the flat, there isn't a classified section that states "DBSS Flats For Sale - Tampines". Where do we advertise it in? We market it as a HDB. To me, it is way more a HDB than it is not. So I would politely remind Mr Khaw to kindly weigh the facts before making such a statement.
Why then do Singaporeans still go for DBSS projects?
Simple, DBSS flats come with furnishings. The whole flat is done up. The flooring is laid, cabinets are built, the finishing is classy. All this is included in the price. Since there is no cash over value (COV) for such flats and there is no cash to be spent on renovation, Singaporeans find it a great deal to buy a DBSS as they can literally include the renovation cost into their loan quantum. For couples with little or no cash, but with little financial sense, this is a great thing for them! If they buy a flat in the open market, they will have to pay a hefty sum for the COV and then fork up $40,000-$50,000 for renovation. With a DBSS flat, they can include such costs into the repayments! Little do they know that they are just kicking the problem down the road.
Should there be a correction in the property market? Is there a property bubble? To me, yes there definitely is one. Let's please realise that many Singaporeans do not benefit from Mr Mah's asset enhancement scheme. So what if our houses increase in value? We cannot monetise it! The only people who can are the PRs who bought at a low, sold at a high (at times to Singaporeans), and then return to their country with the profit. Asset enhancement scheme is a failure. We should then realise that if we cool prices, ie. depreciate prices, it will also not have an effect to the majority of Singaporeans who did not do anything during the recent property boom of the last few years. For example, in 2005, a family stays in a 3 room flat in Ang Mo Kio which is valued at $160,000. Today in 2011 they can sell the flat for about $320,000. However, they do not sell the flat. If 3 years down the road the price falls back to $160,000, it would not affect them at all. This is because they never did anything to the property which they needed to consume and thus could not monetise it. Do we really want a property market whereby public housing will cost more than a million Singapore dollars? Yet the government embarks on this policy of asset appreciation and then asks the young Singaporeans why they do not want to start a family.
Simple answer: MONEY NO ENOUGH.
You spend a huge chunk of your money paying for your public housing, where are the young couples to find the money to start a family? Incomes do not rise as fast as housing prices my dear government.
You have got to read Colin Tan's take on this DBSS fiasco
http://www.todayonline.com/Business/Property/EDC110708-0000112/Its-all-about-the-where
Last but not least, let's make sure the last DBSS does not go out with a bang. This will let the government and developers know that us Singaporeans are not fools. To those who have gone for Centrale 8, good luck to you financially in the long run. You will have to work your life away to pay for your flats. When the ceilings start spalding, the tiles lose their shine and your cabinets start to fall apart, you will realise that what you have bought is EXACTLY a HDB.
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1140077/1/.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
