In the past few weeks we’ve seen record-breaking HDB resale apartment sales, particularly Design, Build and Sell Scheme (DBSS) developments like the $ 1.36 million Natura Loft resale apartment in Bishan and the $ 1.36 million resale apartment in Worth $ 1.295 million on Toa Payoh’s The Peak.
For potential homebuyers in Singapore, especially if they are new to the real estate scene, understanding the differences between DBSS, BTO and ECs can be confusing.
For example, not everyone knows the differences between build-to-order apartments (BTO), DBSS and executive condominiums (EC) or real estate terms such as minimum occupancy (MOP).
So what is the appeal of some of these DBSS flats and how do they differ from HDB BTO flats or ECs?
And more importantly, if there is so much demand for some of these DBSS resale apartments, why has HDB stopped developing them?
What is HDB-DBSS?
HDB BTO apartments are built by HDB, whereby all apartments are designed with a uniform floor plan and standard equipment and the waiting time for an apartment is usually three to four years.
ECs are built by private developers with complete condominiums, but are subject to HDB guidelines such as the 5-year MOP. DBSS flats, on the other hand, was an apartment type from HDB that was introduced in 2005 but discontinued in 2011.
While these apartments were being sold by HDB, they were being built by private developers. Each development was also usually different – some had an extra bedroom, others had balconies and more chic interiors compared to a BTO apartment.
For DBSS apartments, the developer oversaw the design, pricing and construction of the apartment. DBSS homes were supposed to be of a higher quality design, which is why they were selling at higher prices.
Unlike ECs, DBSS developments have no condos – no pool, gym, or event space. It’s like a condominium, but without the condominium’s added features.
In other words, if you have someone (e.g. a DBSS resale apartment) might fit your profile.
More importantly, it could be in an old property (and near a desired school) that you want for your family.
13 DBSS projects were built between 2005 and 2011:
- The Premiere (Tampines)
- City view (Kallang)
- Park Central (Ang Mo Kio)
- Natura Loft (Bishan)
- Lumiere Park (Simei)
- The Summit (Toa Payoh)
- Adora Green (Yishun)
- Centrale 8 (Tampines)
- Belvia (Bedok)
- Parkland Residences (Hougang)
- Lake Vista (Jurong West)
- Trivelis (Clementi)
- Pasir Ris One (Pasir Ris)
A total of around 8,650 DBSS units were built.
Why was HDB DBSS discontinued?
DBSS was discontinued because it no longer served its purpose. It was meant to be for homebuyers who could afford more than one HDB-BTO, but not necessarily a condo.
Unfortunately, due to their suburban or central location, the prices of some DBSS apartments soared up to $ 800,000 at the time of sale – which is almost the price of an EC!
Even if DBSS apartments are supposed to have a more aesthetic design, they do not always meet the expectations of the residents.
Some first-time buyers of DBSS homes complained that their homes had cheap looking workmanship, poor quality materials, and poor workmanship. Ouch.
Problems with DBSS defects were one of the many reasons that DBSS development stopped.
Here are some other reasons 99.co previously covered why the DBSS model didn’t work as expected.
PHOTO: Unsplash
Differences between BTO / HDB resale and DBSS
price
Since DBSS apartments are said to be more expensive than BTO apartments but cheaper than condominium, they have an odd intermediate price.
A four-room DBSS apartment cost approximately $ 460,000 to $ 590,000 while a five-room DBSS apartment cost $ 660,000 to $ 730,000. These were of course prices from 2011.
In comparison, a four-room BTO apartment can cost anywhere from $ 253,000 to $ 617,000, depending on the location, while a five-room BTO apartment can cost up to $ 725,000.
The prices for non-DBSS HDB resale apartments are of course higher depending on their location, living space and nearby amenities.
In the case of the DBSS apartments, the HDB has laid down the requirements for the purchase authorization and given the private property developers extensive planning bases, but it has the final say in many decisions about the apartments.
Because of this, some of the DBSS apartments were selling at outrageous prices when they were released – in fact, Centrale 8’s five-bedroom apartment had an asking price of $ 880,000 in 2015!
The advantage is that DBSS apartments also achieve very high resale prices. Most recently, a five-bedroom DBSS apartment in the Natura Loft in Bishan was sold for $ 1.36 million. That is a record price for an HDB apartment!
And the reason for its price? Its prime location.
Location
A major selling point for DBSS is its prime location. Most of the millions of homes are in desirable, well-built areas such as Bishan, Kallang and Toa Payoh.
You are usually within 1 km of preferred schools like Natura Loft, which is directly across from the Catholic High Primary School.
It also helps that the apartments are relatively new and most have been rented for about 80 years.
These locations are not only relatively central, but are also located in established settlements. This means the government can buy DBSS homes to refurbish next time.
Unfortunately, BTO apartments are not often built in old settlements, and those in good locations are expensive. Getting a BTO in desirable mature properties can be insanely difficult.
So what’s better?
If this is your first time home buying, the natural choice is to choose a BTO apartment. They are heavily subsidized by the government which is a plus!
They’re new too, so you can enjoy most of the 99 year lease. If you can’t wait, consider HDB apartments without a DBSS.
In the case of DBSS apartments, the lease will be a little shorter because they are no longer in production. And you have to compete for one in the HDB resale market – and at sometimes exorbitant prices.
If you’re okay with paying more than $ 1 million for a valuable DBSS home in a central or suburban location, consider some of the new startup ECs or private condos.
However, if the DBSS home is in a good location and the resale price is beyond your budget, you may benefit from owning a home in an old property due to the convenience, convenience, and possible future price increases.
ALSO READ: What is the HDB Income Cap for BTO, EC, and Resale Homes?
This article was first published in 99.
