Home > Singapore Scene > DBSS is still public housing, no?

DBSS is still public housing, no?


The last few days the incredulous chatter amongst Singaporeans must have been about the $880,000 price tag of a 5-room HDB flat, Pardon me, not HDB but DBSS as Minister Khaw Boon Wan was quick to point out. Yes, Minister – in terms of pricing certainly not HDB, but in terms of regulations, finances, how different is the DBSS flat?

Reading the papers, it would appear that land was sold to private developers. These were in turn tasked to build flats for the public, the pricing of which is in the control of the private developers. This development in question was the baby of Sim Lian which paid $261 per square foot ppr. I am not sure if my calculation is correct but doesn’t that mean for a 1200 sq ft apartment, the land cost is $313,200. What then is the profit margin if this unit is sold for $880,000? I know there are construction and other costs. Even so? There are a total of 178 five room units. Just do the math. 3-room flat at 667 sq ft –land cost $174,000. Selling price is $510,000. 4-rm at 904 sq ft, land cost $236,000, selling price is $683,000. A total of 708 units will be built in all, expected to be ready in 2014.

It Is unfathomable why private developers are allowed to make astronomical profits from public housing

Something is grossly wrong here. Now I know this cannot be laid at the feet of Minister Khaw because he was not in charge then. But surely whoever was in charge had to account to the cabinet, the parliament? Are we so confident of our million dollar ministers that they are given a free rein?

First the land cost. By selling to private developers, who kept the money for the land? If it is sold by tender, presumably the highest bidder will get the project, then who will have to pay for it in the end? Developers are in it for a profit, so who pays for HDB’s profit from the land sale? Bear in mind these properties are still public housing, and buyers are subjected to HDB rules

Secondly, if buyers are bound by the rules and regulations of HDB, why are developers given a blank cheque to price as they please? Don’t forget there are income ceilings and a myriad of conditions in order to qualify to buy the property and to be eligible for loans. In the event the property has to be sold, again conditions have to be met. Given these limitations, frankly, I do not see why land for public housing should be sold to the highest bidder. Actually I do not understand the rationale of DBSS at all. But if it has to be, it is more logical for developers to submit their development proposals, detailing fixtures, and selling prices. The price of land should be fixed. Thus, instead of being given a free hand, a maximum selling price should be factored in, say up to 25% above BTO prices in the same location. Let a panel judge the developers’ plans – in terms of design, use of land, construction period, proposed selling price, fixtures…and let the best developer win. HDB should not be out there trying to make a profit for themselves at the expense of the buyers of public property.

Also I have concerns re the affordability. There are people desperate enough for a house in a good location to pay for it. I did a quick check with the HDB loan calculator. Based on the $880 000 selling price, I put in a need for roughly $750 000 loan. Incidentally, even with a $20 000 housing grant, the price will come up to $900 000. So the cpf and cash that must be forked out is at least $150 000. The loan works out to $2900 a month if a 30 year loan is taken. Now if a couple earns $10 000, which is the maximum allowed for DBSS flat, this is a cool 30% of their income. I sure hope these folks are given financial counseling before they sign the agreement. These days, there are hardly any iron rice bowls. Global economy goes through wild swings. If there is no buffer, anything can be unsettling – changes in cpf contribution, salary cuts due to recession, retrenchment, sudden medical conditions, and those on bank loans – change in interest rates – this is not a perfect world. Unforeseen events do occur. Don’t forget, in a crunch, it will be nearly impossible to downgrade. Most buyers will run the risk of being in negative equity should the property market correct.

Minister Khaw was quick on the draw. He told citizens that if the price is too high, don’t buy the flat. He said that he was not helpless either – he will ramp up the buildings of new BTO flats.

True Minister, but it seems heartbreaking to see what could have been BTO apartments in a mature estate given over to a private developer. Now this property is out of reach of most ordinary Singaporeans. I put it to you that you can do much more. Revamp the rules and conditions of DBSS. If the conditions are not favourable enough to the developers, then don’t tender for them. If they are not interested, HDB can easily do a BTO isn’t it? Focus on providing housing and not some fancy private condominium wannabe projects that fool no one.


  1. anon
    June 21, 2011 at 2:09 am

    So all those hot air during and post election are just hot air?
    Looks like it. Changing from Minister Mah to Minister Khaw is merely cosmetic, like merely changing the wrapping. Inside still the same! Old rancid wine in ‘new’ bottle.

    • SpeakSpokeWriteWrote
      June 21, 2011 at 2:19 am

      on the one hand KBW inherited this problem. However, he should not be powerless and has to rectify this going forward.

  2. Guest
    June 21, 2011 at 6:32 am

    If we sell these homes cheaply or make it ” affordable”( a popular term for people who want to buy low and sell high later), will the owners( not renters) price their home at…market price when they sell?

    I think home owners are no less greedy than developers? Eventually, like it or not, prices would rise – as evident all over the world.

  3. xtrocious
    June 23, 2011 at 3:55 am

    Location, location, location comes to mind…

    Even if there is going to be more supply in the future, these new flats will not be at choice locations…

    I think this alone explains why Centrale was 2x oversubscribed despite our dear minister telling lesser mortals to stay away if we can’t afford…

    • SpeakSpokeWriteWrote
      June 23, 2011 at 4:01 am

      oh is the application data out? yup – tats y its really rubbing salt into the wound. well, the property bubble that kbw warned of is not going to happen anytime soon. more will be sucked into the system.

  4. SpeakSpokeWriteWrote
    June 24, 2011 at 1:46 pm

    wow – tin pei ling make similar comments as most netizens and get full coverage in ST lei..

  5. November 5, 2011 at 2:40 pm

    F*ckin? awesome issues here. I am very glad to look your post. Thanks so much and i’m having a look forward to contact you. Will you please drop me a mail?

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: