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(E) Government Land Sale (GLS) Programme

(E.1) Poor showing at landed housing plot tender

The HDB which put up a landed housing parcel in Westwood Avenue at Jurong West for public tender decided not to award the site to the top bidder citing low bid price. The state tender drew only two bids, and a dismal top bid of $11.8 million - or just $77.80 per square foot (psf) – not even half of the $200-$250 experts had earlier estimated.

The response was a far cry from the URA land auction held in October last year where 12 sub-divided landed housing plots called Sembawang Greenvale near Sembawang Beach were snapped up at $37.09 million or about $285 psf of land area on average.

Phase Two comprising 11 land parcels for a total of 90 terrace houses has been launched recently.

The poor showing at the Westwood site could be due to the obscure location of the Westwood housing estate and the lack of natural attraction such as a beach, a lake or lagoon etc. Moreover, major developers have been sitting on the fence - waiting for clearer sign of recovery in the global economy.

(E.2) Yishun 99-year condo site attracted lukewarm four bids

A state tender for a 99-year condominium site at Yishun fronting Lower Seletar Reservoir and close to Singapore Orchid Country Club/Golf Course attracted four bids. The top bid was $213 million or $350 psf per plot ratio (ppr) from MCL Land which is almost 70% more than its closest rival at $127 million or $208 psf ppr by a development company controlled by the Wee family.

Frasers Centrepoint, Sim Lian Land and Cheung Kong Holdings unit Billion Rise all tried their luck with very low bid prices.

(E.3) West Coast condo site attracted 12 tenders

A seafront site at West Coast area, next to Blue Horizon condo, attracted 12 bids – the best showing at the GLS programme so far in the first quarter. The winning bid of $110.44 million or $305 per square foot per plot ratio (psf ppr) was put in by Billion Rise, a company linked to Hong Kong based Cheung Kong Holdings.

For $305 psf ppr, the site is a good bargain. However, the generally low bids in this tender exercise betrayed the sense of cautiousness and restraint.

Nonetheless, the quality of the site on offer did the trick of pulling in the many usual suspects.  Besides a high plot ratio of 2.8 and its expansive sea views and the greenery of the West Coast Park, the site is also a short drive from the VivoCity shopping and entertainment complex.

(F) Performance of HDB Resale Market

(F.1) HDB Resale Volume

In March 2008, the HDB resale volume rose by 106 units or 5.2% from the previous month to reach 2,150 transactions. It was an encouraging sign as the HDB resale volume has maintained at a healthy level of over 2,000 transactions per month. The larger heartland estates continue to take the lion share of the transactions with Woodlands enjoying the highest transactions volume since December 2007.

The demand for larger flats such as 5-room flats remains robust with 5-room flat taking up 26.47% of the total transactions as compared with 24.22% a month earlier.

(F.2) HDB Resale Prices

In terms of HDB resale prices, the price index for public flats rose 3.4% in the first quarter of 2008 over the preceding quarter. In the final quarter of last year, prices of HDB resale flats grew 5.7% quarter-on-quarter.

The market valuations for resale flats have generally risen and as such even if the cash-over-valuations are slightly lower than late last year, the total resale price will still be steady or higher.

Another reason contributing to strong price trend is the phenomenon of savvy en bloc sellers who, having cashed out of their old condos, are shying from the saturated high-end property segment, fearing the uncertain global financial market. Many of them are finding alternative, or perhaps temporary, housing in larger HDB flats so as to preserve cash in the interim before bargain hunting again after the expected correction in the high-end property segment.

While this group may not be big, they do help to ‘sprinkle some gold dust’ on the rosy picture of the HDB resale market.

Table [16] March 2008 HDB Resale Transactions