Developers haven't learnt lesson about bidding high for land

I was alarmed to read that developers were bidding aggressively for land (Aggressive land bids drive premiums up at govt sites; May 17).

It seems that they have not learnt their lesson.

When they submit high bids for the plots, they have to sell the completed units at sky-high prices to cover their land and construction costs. But the exorbitant prices may turn potential buyers away.

The vacancy rate of private residential units was 8.4 per cent in the fourth quarter of last year, with another 40,913 units uncompleted or in the pipeline.

Furthermore, with around 17,000 Build-To-Order flats promised this year, and future BTO flats planned in prime areas like the Greater Southern Waterfront, buyers may be enticed away from private property.

Developers have already requested the Government to consider extending the timeframe for them to sell their units or face penalties.

Whether the current bidding will result in the same pleas in future is anybody's guess.

Making housing more affordable for Singaporeans is going to be difficult if we allow developments' costs to rise.

Francis Cheng

A version of this article appeared in the print edition of The Straits Times on May 22, 2017, with the headline 'Developers haven't learnt lesson about bidding high for land'. Print Edition | Subscribe