Design, Build and Sell Scheme is losing relevance: Property experts

SINGAPORE — Property experts say the Design, Build and Sell Scheme (DBSS) is losing its relevance and should be scrapped.

The scheme was suspended in 2011, but came under the spotlight after recent complaints by residents over defects in their new DBSS flats. The Housing and Development Board (HDB) says the scheme is not currently its priority.

One four-room DBSS unit at Ang Mo Kio gave its owner nightmares. Forty-five-year-old Ng Tong Seng had moved into the flat - which cost more than S$500,000 - in December 2012. Within weeks, he found numerous flaws, from bug infestation to cracks on the walls.

It was a painful process for Mr Ng, who had to spend months getting the developer to rectify the defects.

“The number of defects filed by the residents was a lot,” he said. “And they were having a difficult time catching up with all the work. We have about one year to get all these rectified by the developer and the developer took their own sweet time.”

He said the HDB did not offer much help.

“We are being left alone by authorities,” he said. “We bought the house under the ruling of HDB. They threw the rule books at us, but when we faced problems and approached them for help, they said, ‘Sorry, I can’t do anything’. So, that is frustrating. On one side, you try to govern me, on the other side, you can’t help me. So, I’m very confused about their rule.”

Residents of the Trivelis DBSS estate in Clementi have also questioned HDB’s role in the scheme. About 500 of them have complained about problems such as rusty dish holders and flooding in the corridors.

The housing board says it oversees the scheme, but under the sale and purchase agreement, developers must rectify defects reported by buyers within a year.

HDB brought on board private developers to bring diversity and creativity to public housing designs, when it introduced the scheme in 2005. The condominium-like furnishings of DBSS units initially grabbed attention.

But experts say the quality of Build-to-Order (BTO) flats has gone up.

Associate Professor Sing Tien Foo from the Department of Real Estate at the National University of Singapore said: “I think the differentiation has become smaller. So, if the price differentiation is relatively big, it makes DBSS less attractive in that sense compared to BTO flats, because there’s still a price gap between BTO and DBSS flats.

“So, we might see that the DBSS scheme may no longer be necessary in the near future. So, this is probably a good time to phase it out.”

The scheme was intended to cater for the “sandwiched class”, which referred to those who could not afford private condominiums, but did not qualify for BTO flats because their income exceeded the qualifying ceiling, which was then set at S$8,000.

However, analysts say prices between private and HDB units are narrowing, which means the scheme is losing its target group. Furthermore, the income ceiling for BTO flats was raised to S$10,000 in 2011, the same as that for DBSS properties.

With not much difference in quality, they added that home buyers will be more inclined to purchase BTO flats, which are cheaper. This would lower demand for DBSS flats.

Still, one expert says it’s better to suspend the scheme than scrap it totally.

“Because we never know that, perhaps one day when prices start to escalate quickly again, there may be a need to bring back a scheme that is similar to DBSS,” said Mr Nicholas Mak, an executive director for research and consultancy at SLP International Property Consultants. “But I think in the next two or three years, the chances of it coming back are not high.”

There have been 13 DBSS projects since the scheme was introduced. CHANNEL NEWSASIA