Bids for 3 EC sites to close on same day

Bids for 3 EC sites to close on same day

SINGAPORE - In a move to moderate tender bids and future property prices, the tender for three sites will close on the same day for the first time.

Included in this exercise is an executive condominium (EC) site at Punggol Central, one of the four sites released as part of the Government Land Sales Programme for the first half of 2013.

The other two EC sites whose tender closes on July 30 are in Punggol Drive and Yuan Ching Road.

The Punggol Central plot, which is about 146,010 sq ft, has a maximum building height of 64 metres above mean sea level (AMSL). Maximum gross floor area (GFA) for the site is about 438,030 sq ft. It will be launched for sale on April 29 and is expected to yield about 395 homes.

The Punggol Drive and Yuan Ching Road plots will be launched in June.

The idea to offer multiple sites for sale at around the same time was flagged as a possibility by the Urban Redevelopment Authority's (URA) earlier this year.

In a statement released on Monday, the Housing and Development Board (HDB) said the move to close the tenders on the same day was initiated in response to feedback from the public and real estate industry that this could help moderate tender bids and future property prices.

DWG's senior manager of training, research and consultancy, Lee Sze Teck, said that while the number of participating bidders might moderate, bid prices might not necessarily be lower.

Instead, the government should launch and close tenders for sites in the same area on the same day, suggested Mr Lee.

"For example, the sites at Anchorvale Crescent and Fernvale Close, both of which are in Sengkang, can have the same closing date," said Mr Lee.

"If one of the bids is too high, the price at which the project can be launched will be curtailed by the other site which was sold at a lower price. In this way, developers will be cautious about bidding.

"But the downside of this is that developers with greater financial muscle could make a clean sweep of the sites and achieve certain pricing power in the area."

Nicholas Mak, executive director, research and consultancy, at SLP International Property Consultants, warned that lower land prices does not necessarily lead to lower housing prices.

"The developer that managed to acquire the land at a relatively low price will still launch the new development at the market rate at the time of the launch. Therefore if the government's objective is to ensure lower EC prices ... the government would have to supplement this new initiative with other measures," said Mr Mak.

Lee Lay Keng, DTZ's head of Singapore Research, was of the view that this could moderate tender bids as "there could be fewer bidders for each site as developers will have to weigh the different options and put in a bid for their most preferred choice."

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