Buyers of DBSS project unlikely to accept asking prices of $720k-$850k for five-room units
[SINGAPORE] Residents at The Premiere who are banking on their units' better location and fittings to land them a good resale price might be in for a rude awakening.
Units in the five-year-old pilot Design, Build and Sell Scheme (DBSS) project in Tampines Avenue 6 are now ripe for the resale market, but a scan of the advertisements on various marketing platforms shows that sellers are asking for higher prices than consultants think the market will accept.
The asking prices for five-room units, available in 1,173 sq ft, 1,184 sq ft and 1,227 sq ft configurations, are sitting between $720,000 and $850,000.
Consultants say buyers are unlikely to bite.
Ong Kah Seng, director at R'ST Research, said he expects a five-room unit at The Premiere to be transacted at between $650,000 and $700,000.
Going by the HDB website, regular five-room HDB flats within 500 metres of The Premiere which were approved for resale last year fetched between $520,000 and $608,000.
At the ST Property website, the three listed advertisements for units at The Premiere received 416 page views in the last two weeks. Based on the advertisements, the average asking price of those units is $655 per sq ft (psf).
Patrick Wee, senior marketing director at ERA Realty Network, said his listing had attracted a fair bit of interest.
"The HDB market is rather quiet at the moment, but even then, I'm getting quite a fair number of calls," he said, adding that he was still waiting for the valuation report and so has not yet shown the flat to interested buyers.
But consultants say that while The Premiere will certainly command a premium over regular HDB flats, sellers may have to lower their price expectations given the current climate; HDB's lending restrictions, for example, have limited the pool of potential buyers.
The Premiere was the first DBSS site rolled out by HDB. Back in 2005, it was lauded as a major shift in Singapore's housing programme, offering buyers a middle ground between the Build-To-Order (BTO) flats and executive condominium units.
Developed by the private-sector Sim Lian Group, the 616-unit Premiere opened to much fanfare, pulling in 5,900 applications in late 2006.
It received its Temporary Occupation Permit in December 2008. Its residents have since lived there for five years and have become eligible to sell their units, but to date, no resale transactions have been recorded.
Eugene Lim, key executive officer at ERA Singapore, said the units there will naturally command a premium over the neighbouring BTO flats.
"As these (DBSS) flats were designed and built by private developers, they have a certain 'private' feel in the interior and layout, and will appeal to buyers looking for that condo look and feel but do not mind the fact that it is a public flat," he said.
He added that at five years old, the units are new, relative to other Tampines flats put up for resale, which would generally be more than 15 years old.
The price-sensitive house-hunter may not bite. With the current mortgage servicing ratio (MSR) capped at 30 per cent and the loan term capped at 25 years, such buyers may not favour higher-priced flats, given that they need to fork out more equity, he said.
R'ST Research's Mr Ong said he expects reaction to these flats to be "lukewarm", and that demand for resale flats will likely be directed at older three-room and four-room flats, which are more competitively priced.
He said: "DBSS flats have breached the affordability limit of many resale flat buyers ... Also, DBSS flats are non-gated developments, so it is unlikely that there will be many buyers who are willing to pay a hefty premium for a resale unit. Executive condominiums (ECs) and private condominiums are usually gated with a range of facilities, so residents can enjoy that sense of exclusivity."
That being said, The Premiere, by virtue of its location, may find traction among private-home downgraders, said DTZ's Mr Wong.
Mr Ong said he reckoned it would be hard to brand DBSS resale flats as having enough of an edge over other flats to command a "super premium".
He added, however, that DBSS units have a uniqueness about them, since no more DBSS sites have been launched since 2011.
This was a reference to the DBSS programme having been suspended that year, following a public outcry over a new Centrale 8 DBSS unit - also in Tampines - costing $880,000.