Government Land Sales Update: Are There Any Potential Opportunities for Homebuyers?

Government Land Sales (GLS) is an important leading indicator in the real estate market. By looking at where the upcoming supply of housing is going to be, we can spot future potential opportunities in the market.

Let us take a look at some of the notable land sales that happened in the past quarter as well as new lands that are opened for tender to gain more insights into what are the Government plans in shaping Singapore’s real estate.

Core Central Region (CCR)

Source: URA

The parcel of land is located right beside the Orchard Boulevard MRT station and could be considered the prime of the prime in terms of location. 

There were 4 bids received for this plot, and all of them have very similar tendered sale prices. What is interesting is that the winning land bid worked out to around $1,616 per square feet per plot ratio (psf ppr), which is 32% lower than a nearby plot which closed at $2,377 psf ppr.

This suggests that developers are taking a more cautious approach, not only in this particular area but also in other plots that we will dive into later.

Notably, Cuscaden Reserve, which was launched back in September 2019, only sold 12 units before March this year at an average price of around $3,600 psf. 

With their extended Additional Buyer Stamp Duty (ABSD) deadline nearing, and combined with the fact that the project at Orchard Boulevard possibly launching at around $2,983 psf, it might be a possible reason why they relaunched Cuscaden Reserve at $2,900 psf.

This presents a potential property consideration for investors looking to buy properties in the CCR.

Source: URA

Another plot that recently got awarded in the CCR is Zion Road Parcel A which closed at a land bid price of $1,202 psf ppr. We can observe a similar trend with the Orchard Boulevard plot where the land bid price is almost 30% lower than a neighbouring plot which closed at $1,732 psf ppr back in Dec 2017.

Furthermore, there was only one bid for the Zion Road Parcel A plot which signifies developers have lower confidence in the overall market as well as the CCR area. 

Notably, this Zion Road Parcel A plot consists of the newly released long-stay serviced apartments. The service apartments can potentially cater to working professionals on short-term contracts and medical tourists as it is near Singapore General Hospital, one-north and National University Hospital.

With this new factor of service apartments, this could push up development costs and it is hard to predict the launch price of this project at Zion Road Parcel A.

The consumers’ reaction to this project could provide more insights into whether these types of projects is viable in the future.

Additionally, two more plots in the area are already open for tender. With this much supply injected into the area, we might potentially have a surprise once launch prices are revealed for these new projects.

Rest of Central Region (RCR)

Source: URA

The tender for Holland Drive was closed recently with UOL, CapitaLand Group clinching the top spot at around $1,285 psf ppr. The next close bid by Hong Leong Group only had a 5% difference.

The competition for this plot is low with only 3 bids compared to the adjacent plot which achieved 15 bids back in 2018. From this, we can infer that developers are all bidding more cautiously.

Furthermore, the $1,888 psf ppr land price of One Holland Village Residences is much higher than the $1,202 psf ppr for Zion Road Parcel A, despite Zion Road being in the CCR and One Holland Village in the RCR.

This presents potential opportunity, not only for the project to be launched at Zion Road but also this plot at Holland Drive.

After going down to Holland Village and taking a look, I must say I was pleasantly surprised.

One Holland Village is just a short 3 minutes walk from the MRT and the mall has an open concept. Even with the rainy weather, the mall is still mostly dry and clean. It is also pet-friendly, as I have spotted several dog owners having a meal in one of the restaurants.

The market beside the mall is also one of the cleanest markets I have ever been to. Overall, the environment of Holland Village is well kept and I can see why One Holland Village Residences is selling at such a high price tag.

Even though the project is not integrated, there is not much difference with an integrated one. The close proximity to the MRT as well as the sheltered link bridge to the mall makes it so much more convenient.

Outside of Central Region (OCR)

Source: URA

Upper Thomson Road Parcel B exhibited a very similar trend to Zion Road Parcel A, with only one bidder, GuocoLand (Singapore), who also dominated the nearby Lentor area with their recent new launches, notably Lentor Mansion, Lentor Residences, Lentor Modern and the upcoming Lentor Central project.

The bid price for this Upper Thomson Road Parcel B is at $905 psf ppr, significantly lower than the bid prices in the nearby Lentor plots. However, we have to take into consideration that this project contains the newly introduced long-stay service apartments.

Similar to Zion Road Parcel A, this could potentially push up the development costs, which in turn, might not make this project significantly cheaper than the new launches in the Lentor area. It would be difficult to predict the launch price.

Source: URA

Another plot that was opened for tender in the OCR is this Canberra Crescent plot. As we can see, this plot is surrounded by a lot of Executive Condominiums (EC) and is near the North South Corridor that is going to be completed in 2027 – 2029. 

This plot will alleviate the pent up demand for new private condominiums in the area as most of the new launches that were launched in this area the past few years have been mostly ECs, which not all buyers are able to buy due to EC restrictions.

With the resale ECs having a price point of around $1,300 psf, the new launch project may possibly launch at a price point of around $1,800 psf. This price point is below average market price for new launch and with its proximity to the MRT, could possibly present an opportunity.

Source: URA

The last plot that was opened for tender recently is De Souza Avenue. This is located near Bukit Timah area with the nearest MRT being Beauty World.

This area is part of the Bukit Timah Masterplan which aims to integrate the surrounding greenery with commercial and community amenities.

With the average price point of a new launch in the area around $2,000 psf, it would be exciting to see what the new launch price of De Souza Avenue is.

Fun fact: The Hillford has a special 60 year lease as it is designed as a retirement resort targeted towards retirees. It even has elderly-friendly amenities.

Final Thoughts

Even though the property market seems to be cooling down, with developers taking a more cautious stance when bidding for lands, we can still see opportunities lie within all these lands that are released.

Different regions of Singapore have properties that cater to different groups of homebuyers. Price may be an important factor but not the only factor. When we spot opportunities, it would be good to consider price point in tandem with other factors too.