Wednesday, March 27, 2013

Government may offer several land sites for sale at one go

The Straits Times  |  Mar 23, 2013
This may moderate developers' bids and help rein in home prices

In a bid to rein in rising property prices, the Government is looking at offering multiple sites for sale to developers in a given area at around the same time.

The idea is that if a few sites near each other - or possessing other common features - are offered in one go, developers may put in lower bid prices, which may mean lower home prices in the long run.

The Urban Redevelopment Authority (URA) flagged this possible tweaking of the Government Land Sales (GLS) programme earlier this week.

"Many have suggested that batching land tenders may help to moderate tender bids and hence subsequent property prices," it told The Straits Times.

"We are prepared to do so opportunistically, for example when we can identify sites that are located close to each other or share other common characteristics."

This could include, for instance, several sites being offered for executive condominiums (EC).

The URA said the first trial could be tenders for three EC sites. One is in Yuan Ching Road, Jurong, and the other two in Punggol Central and Punggol Drive. They are on the Housing Board's GLS list of sites confirmed for sale in the first half of the year.

The sites would be released for tender with the same closing date, though the current different launch dates will not change. The Punggol Central site tender is set for launch in April, while the other two are slated for June.

Developers say the move would help to dampen property price increases, while the Real Estate Developers' Association of Singapore said it supported refinements to the land tender system that could help moderate prices.

But boutique developer EL Development's managing director Lim Yew Soon said releasing several nearby sites could raise pressure for land tenders. "The competition will be very keen. The big players would likely tender for all the adjacent plots together."

Still, analysts mostly say the move could ease land price rises.

Savills Singapore research head Alan Cheong said the current GLS system was one of the major factors driving up property prices.

He said that in Tanah Merah, land prices jumped on average 21.8 per cent each time over three tenders of nearby sites last year.
The first, at Bedok South Avenue 3, was won for $534 psf per plot ratio (ppr) in February last year by Far East Organization, Frasers Centrepoint and Sekisui House, to be developed into eCO.

Then, Fragrance Group and World Class Land paid $676 psf ppr - 27 per cent more - for a plot near Tanah Merah MRT, to be Urban Vista, last August.

The third site, opposite Urban Vista, was won for $791 psf ppr by Keppel Land in October last year, 17 per cent higher than the tender price for Urban Vista.

DWG senior manager Lee Sze Teck said the proposal would "put a check on developers submitting overly optimistic bids".

However, R'ST Research director Ong Kah Seng said it could deplete the supply of new sites faster in mature estates.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)

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