Property cooling measures proving successful: Khaw

Property cooling measures proving successful: Khaw

Source: Business Times

Five sites yielding some 2,880 homes have been released for sale, even as the government has pledged that it remains ready to cool the housing market if necessary.

Of the five 99-year-leasehold sites launched for sale this month under the government's plans to ensure a significant supply of housing - public and private - in the next two years, two are executive condominium (EC) sites. The first EC site is next to Flo Residence, at the junction of Punggol Field Walk and Punggol East. Sitting on 153,999 sq ft of land, it has maximum gross floor area (GFA) of about 461,997 sq ft and is expected to yield 435 units.

Lee Sze Teck, senior manager of training, research and consultancy at DWG, thinks that, although the demand for ECs should remain healthy, the take-up rate may be slow because of the number of options in the market.

He expects the site to attract a top bid of $270 to $320 per sq ft per plot ratio (psf ppr), and pull in four to eight bidders. Other analysts peg the bid at $280 to $329 psf ppr. They expect "moderate interest", given that the site is located away from Punggol MRT Station and the town centre. The tender for this land parcel closes on 6 December.

The second site, located next to Sky Habitat in Bishan St 14, sits on a 120,855-sq-ft plot, and has maximum GFA of 592,189 sq ft, enough for 645 units. The land parcel set aside for Sky Habitat was sold to CapitaLand in February last year at $550 million, or $869 psf ppr.

One analyst reckons that a reasonable land price for the parcel released for sale - one which would yield a launch price attractive to home buyers - could range from $680 to $735 psf ppr. Ten to 15 bids could be submitted, he said. However, CapitaLand is likely to protect is market position, which could ensure the top bid does not fall below $830 psf ppr, he said. DWG's Mr Lee expects the site to attract more than 10 bidders, with the top bid between $800 and $850 psf ppr.

The tender for this site closes on 29 November.

Another EC site at the Sembawang Crescent- Sembawang Drive junction, measuring 233,760 sq ft, will be launched for tender on 30 October. It has a total GFA of 654,527 sq ft and can yield about 650 units.

One analyst thinks that this land parcel is a choice site for a quality EC development due to its relative proximity to Sembawang MRT Station and Sembawang bus interchange." He expects the top bids to sit between $295 and $330 psf ppr. "As there's no other new EC project in the vicinity, it could attract some interest from developers. The tender could attract four to seven bids."

But another analyst pointed out that Sembawang is a relatively small new town, so the immediate market catchment could be limited; demand could instead come from "a wider geography". He reckons four to six bidders will submit offers.

DWG's Mr Lee noted the sales performance of One Canberra - 299 units out of 665 units sold as at last month - could result in cautious bidding for this site. He expects the top bid to be between $250 and $300 psf ppr, comparable to the $293 psf ppr for the One Canberra site last October.

Two other sites in Tampines Ave 10, Parcels C and D, were made available for application by developers through the reserve list. Parcel C is approximately 238,860 sq ft, and has maximum GFA of about 668,806 sq ft. It is expected to contain 680 units. Parcel D is 168,567 sq ft and has maximum GFA of 471,988 sq ft. It is expected to contain about 470 units.

DWG's Mr Lee said these sites may not be triggered, given the availability of other choice sites on the confirmed and reserve lists; that being said, the trigger price could be $300 to $350 psf ppr. If both land parcels are launched for sale today, Parcel C could fetch $388 to $441 psf ppr, and Parcel D, $390 to $441 psf ppr, said another analyst. The sites will be launched for tender only upon successful application by a developer who pledges to offer a minimum bid price acceptable to the state.

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