Developers continue to be wary of the executive condominium (EC) market, with another tepid showing at a tender closing yesterday.
The highest bid lodged - $278 per sq ft per plot ratio (psf ppr) - could be, if won, the lowest price on a psf ppr basis for an EC site since July 2011.
The bid from Hao Yuan Investment was also about 18.5 per cent down on the $341 psf ppr paid in May 2013 for the Bellewoods plot in Woodlands Avenue 5 and 6, the last EC land sold in the area.
Hao Yuan's bid of $103.79 million for the plot, a 1.24ha site in Woodlands Avenue 12, was 3.8 per cent above that of Allgreen Properties, which offered $99.98 million or $268 psf ppr.
The one bright spot was that seven bids were received, well up on recent tenders.
The backdrop of a growing stock of 2,400 launched and unsold EC units and a further 6,000 units in the pipeline could have contributed to the low bids, said Mr Desmond Sim, CBRE research head for South-east Asia.
Still, the seven bids were twice the level seen at recent tenders for sites in Anchorvale Crescent and Sembawang Road, providing "some glimmer of cheer in what many might consider a muted market", said Ms Chia Siew Chuin, Colliers International director of research and advisory.
The break-even price for the project could be between $600 to $650 psf, with selling prices from $700 to $750 psf, experts said.
Such pricing would be similar to those of two ECs in the area that were launched in 2013.
Twin Fountains in Woodlands Avenue 6 had sold 384 of 418 units at an average price of $744 psf as at Dec 31, while Forestville EC in Woodlands Drive 16 sold 594 of 653 units at an average price of $732 psf.
In comparison, sales have faltered at Bellewoods, which was launched in November last year and is priced at an average of $800 psf.
It had sold 78 of 561 units as at Dec 31.
This article was first published on February 13, 2015.
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