High price of DBSS flats mean buyers may have to spend a significant portion of their lives paying off loans
THE recent launch of City View @ Boon Keng and the identification by the Housing and Development Board (HDB) of three more sites in Simei, Toa Payoh and Bedok for such developments has taken the price of public housing to a new level.
When compared to other private properties in the area, it seems the prices offered are cheaper. However, one of the points that needs to be answered is whether this is public or private housing? All reports about this latest development have labelled it as HDB flats, but are these HDB prices?
As part of its Design, Build and Sell Scheme (DBSS), the HDB has allowed private developers to buy and then build on the sites and sell the flats.
Benefits of this scheme have been widely published in the print media as well as HDB’s website.
On paper, it seems a wonderful situation for both the public and the HDB - the public gets to have flats with better quality finishes, while the HDB does not have to run the construction itself.
One of the criteria set by the HDB is that the combined family income of the applicants must be below $8,000. Thus, if a couple buys the most expensive flat at City View @ Boon Keng at just over $700,000, they face the prospect of paying more than $2,000 in monthly instalments based on a 90-per-cent loan over 30 years. They would also have to fork out cash on top of their CPF contributions.
The rationale is the same even if they had bought the average-priced ones at about $500,000.
It seems that unless the applicants have healthy savings, they will be spending a significant portion of their lives paying off their loans.
I believe the HDB might need to review the criteria that it has set for DBSS. If the HDB decides that DBSS is the way to go for Singapore’s future housing development, it should take a serious look at the prices that private developers would be setting.
Affordable housing might no longer be realistic if we leave these potential issues unaddressed.
Source : TODAY, Wednesday, January 23, 2008
ReplyDeleteHDB ensures affordability of flats for different groups
Letter from LEONG CHOK KEH
Deputy Director (Policy and Property) for Director (Estate Administration and Property) Housing and Development Board
I REFER to the letter from Chan Han Jun, “A costly commitment” (Jan 8). The Design, Build and Sell Scheme (DBSS) was launched in 2005 to complement HDB’s sales scheme. The objective was to offer HDB flat buyers an additional choice to meet their needs and aspirations.
Under the DBSS, private developers would determine the price of the flats, bearing in mind the location, design features and demand from eligible buyers. It is intended to be one of the many sale options, including resale flats, to cater to the needs of flat buyers.
We wish to clarify that HDB’s Build-to-Order (BTO) sales exercises will remain the mainstay of new flat supply. Under the BTO sales exercises, buyers have a choice of Standard and Premium designs, as well as flats of various sizes, prices and locations. HDB remains committed to ensuring affordability for their target income groups.
HDB has increased the launch of BTO sale exercises in response to demand. Flat-buyers should consider the various types of flats available, based on their needs and affordability. As buying a home is a long-term financial commitment, buyers are advised to exercise financial prudence and purchase a flat within their affordability.