SINGAPORE - The first two of seven confirmed list sites have been launched for sale under the Government Land Sales (GLS) programme for the first half of 2023, with developers expected to bid cautiously in the face of higher interest rates, acquisition and construction costs.
The Urban Redevelopment Authority‘s site in Jalan Tembusu and the Housing Board’s Executive Condominium (EC) site in Tampines Street 62 (parcel B) can yield a total of 1,540 new private homes. These are part of 4,090 residential units to be made available under the first half 2023 GLS programme, which represents a 17 per cent increase from 3,505 units released in the second half 2022.
The tender for the two parcels – the Jalan Tembusu site is about 221,436 sq ft, while the Tampines site is around 301,391 sq ft – will close at noon on July 18.
Located near the upcoming Tanjong Katong MRT Station, the Jalan Tembusu site is a relatively big area that can yield 840 units.
The 99-year leasehold site is expected to attract measured bids, given its potential price quantum of more than $1 billion, and proximity to at least three upcoming large launches – the 638-unit Tembusu Grand, the 816-unit The Continuum in Thiam Siew Avenue, and the 1,035-unit Grand Dunman in Dunman Road, PropNex Realty head of research and content Wong Siew Ying said.
Ms Chia Siew Chuin, head of residential research at JLL, believes the site’s hefty price quantum will likely limit the number of contenders. Top bids could range from $1,300 per sq ft per plot ratio (psf ppr) to $1,350 psf ppr, she said.
City Developments’ Tembusu Grand’s launch will be keenly watched to gauge demand for homes in the area, analysts said.
Huttons Asia senior director of research Lee Sze Teck said “the Katong area has not seen a project launch with a land size of more than 200,000 sq ft since Haig Court in 2004. There could be pent-up demand for larger projects”.
Meanwhile, the robust take-up of the 639-unit Copen Grand in Tengah and the 618-unit Tenet in Tampines at their launches should bolster developers’ confidence in executive condominiums, and augurs well for the Tampines St 62 EC site, which can yield 700 residential units, Ms Wong said.
Developers’ confidence in demand for ECs should result in more bids, but these are likely to be “range-bound as EC buyers are subject to the 30 per cent mortgage servicing ratio (MSR)”, and so more price-sensitive, she added.
The MSR refers to the portion of a borrower’s monthly income that goes towards mortgage payments. It is currently capped at 30 per cent for HDB properties.
Ms Chia said that with just 1,303 EC units left unsold (excluding unsold EC sites), tight supply should continue to underpin demand from developers, with top bids of between $600 psf ppr and $650 psf ppr expected for the 99-year leasehold Tampines St 62 EC site.
Mr Lee said even though the site may draw HDB upgraders due to its proximity to the future Tampines North MRT Station and the upcoming mixed-use project in Tampines Avenue 11, there are some EC projects and GLS EC sites in the pipeline. Potentially tempering bids for the Tampines EC site are two upcoming EC projects in Bukit Batok, an EC site on the GLS confirmed list in Tengah Plantation Loop and two EC sites in Senja Close and Plantation Close on the reserve list, he added.
But Ms Christine Sun, OrangeTee & Tie senior vice-president of research and analytics, noted a lack of new EC supply in Tampines. “Parc Central Residences EC in Tampines is fully sold out, while Tenet has a few unsold units left. As prices of new condos continue to climb and the price gap between new ECs and new condos widens, eligible buyers will choose more affordable ECs,” she said.
She expects bids of between $630 and S$680 psf ppr, and selling prices of new EC units on this site to be between $1,380 and $1,450 psf.
