While prices of private homes have continued to moderate for over a year, residential sites are witnessing a softening in bid prices.
In addition, strong sales have been recorded at new launches, such as the Meyerise at Meyer Road, which sold 35 percent of its units, and the Luxurie in Sengkang, that sold 25 percent.
While there is a need to bid for new sites in order to refill their land banks, developers have been forced to hold back due to fears of a potential economic slowdown.
Last August, the top bid for a mass-market site at Punggol was S$323 psf, one of the lowest prices paid for a condominium site in that region in the past two years.
According to real estate analysts, some banks have also become more cautious in their lending. This may put a ceiling on how high bid prices can go in the next round of the Government Land Sales (GLS) programme.
“I wouldn’t expect the bids to be higher than the previous comparable government land sales in the same vicinity,” said Ku Swee Yong, CEO of International Property Advisor.
“The lenders, at the same time, are going to be a bit more cautious in terms of the numbers that they would be supporting the developers for the bid prices.”
On the other hand, bidding interest is expected to be keen, particularly on sites in sought-after estates.
Out of the 13 land parcels launched for condominium development under the H2 2011 land sales programme, most of the sites located in estates such as Yishun and Bedok will be closely monitored.
“Going by the September release of monthly numbers, the take-up rate is still fairly stable and pretty impressive in some projects,” said Dr Chua Yang Liang, Head of Research & Consultancy at Jones Lang LaSalle.
“So going by those performances — and depending on location — some developers may remain bullish in those particular segments, particularly those in the suburbs, near train stations.”
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