SINGAPORE - A fifth Government Land Sales (GLS) site was launched on Monday in Lentor Hills estate in the Ang Mo Kio planning area, while one more site was put on the reserve list, following robust take-up at suburban new launches AMO Residence and Lentor Modern.
The tender for the Lentor Gardens site – the largest plot among the Lentor GLS sites offered, with a land area of 21,866.7 sq m – closes at noon on April 4, 2023.
The site is located near Lentor MRT Station.
In all, four GLS sites in the area, including those for Lentor Modern and Lentor Hills Residences, have been awarded between July 2021 and September 2022.
On Monday, another site – Lentor Central – went on the GLS reserve list. This means it will be put up for tender only if the minimum price submitted by a developer is acceptable to the Government.
Together, the Lentor Gardens and Lentor Central sites can yield 1,005 residential units.
The successful launches of Lentor Modern, which was 85 per cent sold at a median price of $2,108 per sq ft (psf), and AMO Residence in Ang Mo Kio, which sold 366 of its 372 units in July at a median price of $2,110 psf, indicate strong pent-up demand for homes in the area.
But following tepid bids for two recent GLS tenders for two other Lentor sites in September, analysts expect restrained bidding for the Lentor Gardens site, given ample supply in the area, growing macroeconomic uncertainty and the latest property cooling measures.
The 14,703 sq m Lentor Central site, which can yield 475 units, may not be triggered soon, they added.
“Following the lukewarm response to the two GLS tenders for sites including Lentor Hills Road (Parcel B) in September, developers are not likely to be overly enthusiastic about the Lentor Gardens plot. The ample supply of new homes in the Lentor area, coupled with rising interest rates and construction costs, will likely lead to more restrained bidding,” said Ms Wong Siew Ying, head of research and content at PropNex Realty.
Only two bidders vied for the Lentor Hills Road (Parcel B) site, which had a top bid of $1,130 per sq ft per plot ratio (psf ppr), while the other site found three bidders and fetched a top bid of $1,108 psf ppr.
JLL senior director for research and consultancy Ong Teck Hui noted that there is fresh supply coming from more than 1,300 new units at three Lentor sites, with Lentor Hill Residences potentially hitting the market in the first quarter of 2023.
“In assessing the Lentor Gardens site, developers will be mindful of competing projects in the vicinity as well as uncertain market conditions. Their response to the tender is likely to be cautious,” he said.
While AMO Residence and Lentor Modern were launched at above the median price of $2,000 psf – a price level more commonly seen in the prime and city fringe condo markets – future new launch prices in the Ang Mo Kio planning area may be affected by the latest cooling measures.
“The interest rate floor used to calculate the total debt servicing ratio was increased to 4 per cent from the previous 3.5 per cent, which will reduce the maximum loan available to new home buyers. The reduced affordability may affect the prices of future launches in this area,” said OrangeTee & Tie chief executive Steven Tan.
Analysts say they expect around two to five bidders, and a more conservative land bid of between $1,050 and $1,150 psf ppr for the Lentor Gardens plot.