Monday, June 20, 2011

Design, Build and Sell Scam

The howl that was heard across the island was not about the sighting of a red moon, but the $880,000 price sticker for a 5-room Design, Build and Sell Scheme (DBSS) flat in Tampines. National Development Minister Khaw Boon Wan could have chosen his words better when he commented about the outrage committed on HDB premises, "If buyers find a price too high, they can walk way." Doesn't that sound remarkably similar to SMRT CEO Saw Phaik Hwa's truculent dismissal, that if the train is full, take the next one?

DBSS flats are housing units wedged between regular Build-To-Order (BTO) Housing Board flats and executive condominiums. Buyers must have a household income not exceeding $10,000, whereas the income ceiling for ordinary HDB flats is $8,000 (a number which the minister has already announced intention to raise to $10,000). The HDB website makes the incestuous link very clear: “Design, Build and Sell Scheme (DBSS) flats will be offered for sale under similar eligibility rules, terms and restrictions as applicable to new HDB flats." Which means housing grants are also available. Khaw tried to downplay the loop hole in national housing policy by claiming that "they form a tiny portion of the total housing options for Singapore." On one hand, Khaw maintains his ministry has no control over the flats' pricing. On the other, he promises to ramp up the supply of ordinary BTO flats and "price them appropriately." Does the man even comprehend the scope and responsibility of his new portfolio?

Maybe the minister has forgotten about the hot-button election issue of affordable housing. Maybe he needs to have it explained to him in simple language, that even a 4 year old can understand:
"Not everybody rich. Like minister family. House for staying. Not for speculation. No house, no marriage. No marriage, no kids. No kids, more foreign talent." (in 25 words or less)

Khaw Boon Wan was once upon a time one of the more credible ministers in the cabinet. At one stage, even the PM was envious of his popularity. After the affordable heart by-pass operation, he's starting to sound more like his despicable predecessor in the Ministry of National Development. "When they tendered for the land, price control was not a term of the tender," wrote Khaw in his blog.  Land for DBSS, BTO or plain vanilla HDB flats are government acquired and priced by the Chief Valuer. The mark to market valuation results in large amounts transferred to the secretive reserves, of which Shanmugam says only the past reserves are guarded by the elected president. Who knows what profligate plans they have designed for the present and future reserves?  If a percipient Khaw is privy to the key for affordable housing, he does not seem to have the political will to apply it. The marionettes may have been changed, but the wayang goes on.


  1. I love that 25words of less elevator pitch. MDN should frame that as their Mission, Vision , Values - period. Very simple to understand even for the daft folks at HDB to recalibrate their mindset under the new boss. We know wont be $8, but to come out with a first DBSS under his charge at $880k is a cruel or ironic joke. But all these wayang is not new isn't it. Like the reserves, when is full, they build the next one! So now we have past, present & future pot. So tell me, if the president is only guarding the past pot, who's the invisible president guarding the present/future pot?

  2. Scrap the DBSS scheme and focus on affordable housing for the public. Minister Khaw, please wake up or we vote you out!

  3. To pay 880K for a public flat and still run the risk of loan sharks painting yr walls, foreign workers having a party right at yr door step and PRCs drying their bedsheets at yr playground. Go figure if it is a good buy.

  4. All singaporeans should boycott the project and watch and see how we can force the developers to "tank" the price. It's the only way to send a clear message to them not to "pray pray" the market benchmark. Unless of course there are many daft and newly minted PRs-turned Citizens who are loaded with laundered cash then nobody is going to stop them. But Singaporeans should unite and see through this stupiak scheme for what it is.

  5. Walau ay! Instead of blaming the buyers, the Housing Minister got blame.
    As far as we know, none of our minister has ever point a gun on anybody's head to force them to do anything, including buying a roof over their heads, car(high COEs), First Class Warding in hospital, getting specialist treatment etc. All are at the volition of the people.
    Why blame the ministers after voting for them?

  6. The DBSS scheme simply stands for the Devil's Blood Sucker Scheme. Put it in a choice location, put in some restrictions and add some grants to dress up the package, sure there will be plenty of suckers ready for it.

    Just imagine when everyone wants a cut of the profits, remember to add SLA for the land; URA for the devt charges; HDB for managing the project; private developer for the investment risks; private architect/consultants for the design; how affordable can it really be ?

    And what is a S$30~S$40K grant if the govt can make S$300K~S$400K out of each unit ? Is it not a joke that they even have an income restriction ?

  7. All HDBs should be pegged at a max price of 30% of income (HDB recommendation of affordability), over a period of max number of years, on the income ceiling of $8000.
    AND, to have that max price ceiling, we must then expect tip top quality on the flat, not the usual cheap finishes.
    Using this formula also for smaller flats, we should see the HDB prices under control, irrespective of market forces!

  8. Very soon HDB will build shoebox flats and tell you very affordable..

  9. whatever happened to pegging hdb prices to median-income? why don't we revisit that proposal again now that mah is gone. surely with khaw's compassion he can take a second hard look at this? And last but not least, pls stop discriminating against singles. those in 35-45brackets and clearly decided marriage is not a personal choice, they should get a chance to own an affordable flat too.

  10. to anon 1:22 , you hv to realize that hdb has the habit of saying selling price is pegged to the market forces. ie demand/supply. if we allow this new benchmark as the a norm" , soon this will have an effect on the resale market and next thing you know, prices shoot up once again by another 20-40% jump. is that what you want? is not about blaming, but they need to "intervene" and do something abt it before irrational market gets carried away. simple economics 101

  11. sure, nobody is pointing a gun at the people to choose an EP but they still have to vote right or not? and vote not for a real prez but one that is as iconic as the merlion..deaf and dumb. so how? u don't want to vote? cannot - because is compulsory. then you spoil the vote.(market)..happier?

  12. Grow Up Singaporean, you are a pampered lot. Nobody ask you to buy DBSS flats. If you think that the price is too high, don't buy. See how long the Builder can hold on to these flats before he goes bankrupt. I doubt that will happen because Singaporean who can afford will complain but will still queue for them.

    As long as HDB delivers more BTO flats to Singaporean at lower than the usual affordable prices, I believe many will no bother. Frankly how many waiting for public housing can afford DBSS flats?

  13. It is not right to say that it's ok to price at this level becos nobody points a gun at you to force you to buy.

    There will be some idiots who are either loaded or stupid enough to buy. Following which, HDB will be able to take cue from these transactions and price the ordinary flats higher in accordance to it's "market subsidy" theory. Prices will therefore generally go up, thanks to a small group of idiots.

    Wake up, Singaporeans! Show PAP they still suck at their jobs by voting for the least PAP-affiliated Tan candidate. Let us stick up our collective finger at PAP's policies. Yap, that includes Tin Peiling's criminal acts performed on cooling day.

    Up yours!

  14. @anon 1:22,

    "All are at the volition of the people.
    Why blame the ministers after voting for them?"

    Tell this to the minibond holders...

    A responsible government must step in if the market becomes speculative. Otherwise, you will definitely end up with a bubble followed by a reckoning.

  15. Ministers are elected to help the ordinary Singaporean and not defend the developers and foreigners at our expense. Thought they are to serve the citizens. Hope Ministers have not forgotten their pledges.

  16. The DBSS scheme is a "brainchild" from the Mah BT era, more like no brains policies. Do citizens have any recourse for such profiteering by developers? No doubt buyers are not arm twisted to buy these flats but they do have an impact on resale flats prices. Wll the previous minister be held accountable for such boo boos? He will probably be enjoying his pension and the riches accumulated all these years from tax paying citizens, screw you, peasants!!

  17. For that price and only eigible to those earning
    less than $10,000, even if its a 30 year loan, you can work out the sums of the monthly mortgage payment.
    Buyers would have to commit their entire lives of slavery to the HDB
    Sounds like affordability has move up another rung

  18. Unless and until Sin is struck by a calamity, Singaporeans will believe that under the Present Government; rents, property prices, COE prices, food prices, transportation costs, health costs, funeral costs will all SURELY go on the upward trend. And this 'confidence' will last at least 4 years from now.
    Though $880Ks for 1100 square feet is ridiculous, it appears that there were more applications than the builder could and or is allowed to build. This means there are many re the buyers and those waiting to buy foolish? Cant answer on their behalve, but they are middle-income people who are educated and are likely in executive positions. We probably are no better than them.
    Singaporeans are by and large smart and pragmatic and are always on the look out for bargains.
    One thing I do know and everybody else knows is that the cars in Singapore are bigger and more luxurious and those in the USA are getting smaller and less costly than in early day America. Singaporeans even run out of parking spaces for their cars! See how affordable Sinkies are!
    Still want to complain???

  19. To the people here saying 'nobody force you to buy'..

    1. Housing is an essential good. People need space to stay. Or to put it in economic terms, demand is inelastic.

    2. This isn't a free market. Supply is artificially controlled. This is compounded by 1)

    3. Even if local Singaporeans don't buy it, foreigners with laundered money can afford to. This will drive up prices and rentals for other units.

    4. When the PAP govt compulsorily acquired land at ridiculously low prices it the past, it was for the purpose of providing affordable housing for the masses. Therefore, it is not right for the discounted land to be used as profit making machines for developers.

  20. What is tattler going to write now that the official prices are out?

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