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Here we go again - methinks I've been "crying wolf" once too often on the raging property market, and it has made me look like a fool probably not just on this forum, but among my own friends/peers as well.

Red-hot property market, forever keeps rising, what could go wrong? Tongue

Jun 23, 2011
Twice as many applicants as Centrale 8 flats

Project oversubscribed despite record asking price for DBSS flats
By Cheryl Ong

THE most expensive Design, Build and Sell Scheme (DBSS) flats to hit the market have been two times over-subscribed.

The 708-unit Centrale 8 project in Tampines, which raised an uproar over the $880,000 price tag for its largest units, pulled in 1,431 applications by the deadline on Tuesday.

Some industry observers expressed surprise at this performance, although they pointed out that the number of times over-subscribed is not a good indicator of how well a development eventually sells.

Centrale 8, developed by the Sim Lian Group, made the news last week with a record asking price for a DBSS flat, triggering an outcry that the price was nearly that of executive condominiums.

Sim Lian backed down on its prices to varying degrees across its flat types, hours before applications closed on Tuesday, saying that the quoted price ranges were only 'indicative'. It then released a 'confirmed price range' for the flat types, which showed a $100,000 price drop to $778,000 for the top-end units.

The application result puts Centrale 8 on par with those of more recent DBSS launches. Adora Green in Yishun drew three times as many buyers as there were flats. In 2009, The Peak in Toa Payoh drew about 2,900 applications for 1,203 units. Natura Loft in Bishan in 2008 received 600 applications for 480 flats.

PropNex chief Mohamed Ismail said the two-times over-subscription looked credible, given the uproar over the price and the fact that most applications were put in before the price reduction.

But he noted Sim Lian had not given a breakdown of the number of applicants by flat type. He said: 'It is likely that more people are hoping to buy the lower-end units within their price range.'

Referring to over-subscription being a poor indicator of how quickly the units will be snapped up, he said: 'I will be surprised if Sim Lian gets more than 70 per cent sales for the flats. Buyers will be prudent; if they are offered a flat above their budget, they will reject it.'

But Global Property Strategic Alliance chief executive Jeffrey Hong said Sim Lian's price cuts may well produce a much lower rejection rate, as applications had been submitted on the basis of the higher initial asking prices.

The proof of the attraction of Centrale 8 will come down the road.

As the property market heated up in 2006, the first DBSS development, Sim Lian's 616-unit Premiere@ Tampines, for example, pulled in 5,700 applications.

Despite the hoopla, only 500 flats were sold initially, although long queues formed when the remaining units went up for sale. The five-room flats there eventually sold at $308,000 to $450,000.

Dennis Wee Group director Chris Koh said Premiere's over-subscription rate was unlikely to be repeated: 'The hype for DBSS flats has died down, but the application rate proves that demand for public housing remains strong, despite a high asking price.'

Accounts director Khong Kiong Seng, 48, whose letter published in The Straits Times Forum Page called on the Government to regulate DBSS flat prices, said he was surprised at the application result: 'I thought people would have stepped back because of the high prices, or waited to see what the ministry would do first. I still think the flats too expensive, but those who applied must have good reasons for wanting to buy them anyway.'

The location clinched it for communications manager Fanni Ding, 24, and her fiance, who applied for a four-room flat over family and friends' objections.

After having applied unsuccessfully for two Build-to-Order (BTO) projects in Tampines, she was delighted that Sim Lian had lowered the asking prices.

'Everybody told me not to do it. They said I should buy a resale flat or try my luck with another BTO launch, but I really like the location,' she said.

'My parents live in Tampines too, so I want to be near them.'


That's why I wrote my satire piece below:

I guess its the same when property prices were sliding during early 2009. Those "brave" investors must have got lots of "well-meaning" advice too -don't buy, prices will get lower... (Price go up don't buy; price go down don't buy - when to buy?)

I too was surprised at the strength of the stock and property recovery since then! Now I only give advice to myself - I discover I can't predict the future.

But I've observed one thing. Price going down Singaporeans are more afraid of catching a falling knife (don't buy) and don't say thanks to Govt. Price go up Singaporeans are more afraid of missing out (buy!) and complain a lot to Govt!?