MR PATRICK Tan asked four questions on Design, Build and Sell Scheme (DBSS) flats ('Flat pricing: Four questions on DBSS'; June 21, 2011).
They are good questions.
Land for DBSS flats is sold via open tender to private developers.
DBSS flat buyers are indeed subsidised by the Government, but they receive their subsidy directly through the Central Provident Fund housing grants.
In bidding for the land, developers will have to take into account the demand and the prices they will charge for their flats. If they over-bid, they will make a loss on the project. If they over-price their flats, they risk poor demand.
In the case of Centrale 8 at Tampines, Sim Lian, the developer, won the tender last year at $260 per sq ft.
In accordance with the contractual terms when it tendered for the land, the developer has the flexibility to price the units. HDB does not dictate their prices nor profit from their sales.
The DBSS scheme was introduced in 2005 to offer greater choice and wider variety to meet the housing aspirations of higher-income flat buyers for better design and finishes. So far, 5,500 DBSS units have been built and sold. They make up a small proportion of public housing, but are well appreciated by the buyers.
As part of the overall review of housing policies, the Ministry of National Development will be reviewing the DBSS housing option.