Lukewarm response to DBSS not a sign of property downtrend

Lukewarm response to DBSS not a sign of property downtrend 

 

 

By Rachel Ang

 

The latest site to be released under the Design, Build, Sell, Scheme, or DBSS, received just 2 bids at the close of tender yesterday.

 

Analysts say the lukewarm response is a sign of growing caution among developers.

 

But analysts say this doesn’t necessarily mean that the property market is headed for a downtrend.

 

Sim Lian Land was the top bidder for the DBSS site at Simei Road, entering a tender of 52 million dollars, or 137 dollars per square foot per plot ratio.

 

The figure is at the lower end of market expectations.

 

Propnex CEO Mohamed Ismail said the modest bid reflected Sim Lian’s cautious attitude.

 

He said: “Because DBSS is a very specific market whereby the prices are relatively higher than build to order. This only caters to a certain segment, not everybody qualifies to buy a Design, Build, Sell, Scheme. And as I said, developers are being cautious of the current market, this means that the newer DBSS particularly for this site will be priced much lower.”

 

Nonetheless, Mr Mohamed Ismail said he does not see enough evidence that this cautious attitude among developers is signalling a downturn in the property market.

 

And Head of Research and Consultancy at Chesterton International, Colin Tan, noted that though property sales might be slowing down in general, some locations in Singapore are still seeing a high level of buying interest.

 

He said: “I think the market is turning, and in Singapore’s case, and as usually we’re turning very slowly to have a gradual descent. Well the sales are actually quite slow, and if you notice, the latest URA stats show that the numbers are pretty small, are very small. But if you look at some projects, you look at the Telok Kurau area, you have actually seen that the developers have already priced the units to sell, so they actually have got more sales.”

 

HDB is expected to make its decision on the DBSS tender within the next two weeks.

 

Under DBSS, the developer tenders for the land enjoys flexibility in designing, pricing and selling the flats.

 

Source: 938Live

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