Condo-Style HDB Flats Selling Well

Source : The Sunday Times, May 17, 2009

But at prices of $500,000 to $730,000, the Design, Build and Sell Scheme units don't come cheap

Account manager Samuel Lee and his wife were among those who bought a five-room flat at Parc Lumiere in Simei.

Some 4,500 people turned up last month at the launch of The Peak @ Toa Payoh, a project built under the Design, Build and Sell Scheme (DBSS). Prices at the 1,203-unit go up to $722,000. -- ST PHOTO: DESMOND LIM

Although the recently launched condo- style HDB project offers something more than a regular HDB flat, its location - more than anything else - was what sealed the $477,000 deal for Mr Lee, 27.

'Facilities-wise, it can't beat The Peak and Natura Loft,' he said, referring to two similar projects.

'It's the location. It is literally just across the road from my in-laws'.'

Thanks to buyers like him, Parc Lumiere is nearly sold out, even though its first-come, first-served sale method meant that many buyers had to brave the heat and queue for hours before they got to book a unit.

However, those keen on a condo-style HDB flat - or what HDB terms a Design, Build and Sell Scheme (DBSS) flat - need not fret because there are still units available.

An artist's impression of Natura Loft in Bishan, another DBSS project. -- PHOTO: QINGJIAN REALTY

The 360-unit Parc Lumiere, for instance, has 30 five-room units left for sale, while the 480-unit Natura Loft in Bishan has more than 100 five-room units left.

DBSS projects are designed, built and sold by private developers.

They are ungated and are subject to public housing rules, such as the $8,000 household income ceiling, ethnic quota and a five-year minimum occupation period.

But unlike regular HDB flats, they offer condo-style fittings and layouts.

There are balconies, bay windows and timber flooring in the bedrooms. The kitchen comes with built-in cabinets and the rooms with built-in wardrobes.

They do not come cheap though. As HSR Property Group executive director Eric Cheng said: 'DBSS projects offer very good concepts, interior finishes and layouts, but the only problem is the price. Those with insufficient CPF savings will feel the pinch of the premium for those extras.'

ERA Asia Pacific associate director Eugene Lim pointed out that at their current pricing of $500,000 to $730,000, DBSS flats are priced just a shade below mass market condos in the range of $650,000 to $900,000. 'There is already a slight overlap,' he said.

Property agents said last month before the launch of Parc Lumiere and The Peak that there might be some resistance if DBSS flats were priced above $500,000, particularly given the recession.

Prices at the 1,203-unit The Peak @ Toa Payoh go up to $722,000. At Natura Loft, developer Qingjian Realty said five-room units are available at $590,000 to $739,000, or from $456 per square foot to $578 psf.

PropNex spokesman Adam Tan said that while DBSS projects come with designer furnishings that are typical of condominium units, buyers need to be aware of the fact that outside of one's door, the environment is like that of an HDB estate.

'There are no facilities like pools,' he said.

DBSS projects are for those who want the interior atmosphere of a condo but not the facilities and the relatively hefty maintenance charges that come with them, he added.

HSR's Mr Cheng said DBSS flat buyers are also buying a home in a conducive environment that has been carefully planned by the developer. DBSS flats are also usually in very tall blocks, and some have high ceilings typical of private flats.

Indeed, each DBSS project is different in design and size. Each will attempt to offer features that promise a bit more exclusivity than your regular HDB estate.

Parc Lumiere and Natura Loft offer elevated landscape decks. The Peak has a card-access security system at all ground-floor lift lobbies.

At Park Central in Ang Mo Kio, the rooftop garden above the carpark features a 400m jogging track.

Unlike regular flats, DBSS projects may offer premium appliances. Natura Loft, for instance, offers rain showers and Electrolux cooker hobs, while The Peak offers Daikin air-conditioning systems.

Currently, there is just one other vacant DBSS site in Bedok Reservoir Crescent, but the Government has yet to launch it for sale.

Although falling private-home prices have presented low-end home buyers with more options, some have their hearts firmly set on a DBSS project.

Mr Lee, for instance, compared Parc Lumiere to a Melville Park condo apartment but decided against the smaller unit in the latter.

'I've also considered the resale value. When the Tampines DBSS project came out, people said the price was very high. Now, based on the experience of the Tampines DBSS, I don't think we will lose out.'

In late 2006, the first DBSS project, Premiere @ Tampines, drew nearly 6,000 applications for 616 flats priced from $138,000 to $450,000. Housing prices have risen since.

But whether DBSS buyers can make a profit on resale will depend on how the mass market moves, said ERA's Mr Lim.

For DBSS flats to be resold at say $600,000 to $850,000, mass market condo prices will need to move up higher to between $800,000 and more than $1 million, he said.

'This is possible if there is another economic boom that brings all-round prosperity and the whole property market moves up across all categories,' said Mr Lim.

'Whether it can happen in seven to eight years, it is difficult to predict. If it does happen, it will likely be a window period for these DBSS flat owners to make the resale profits. Usually, the best time to sell a new flat on the resale market is when it is about five to eight years old. Thereafter, prices may dip again.'