The 14 landed housing plots that were offered in a government land auction in Sembawang attracted strong bidding and bullish offers as property developers renewed their confidence in the landed housing market.
Majority of the winning bids for the sites were within the range of $500 psf to $600 psf, more than twice the price of the adjacent sites that were snapped up in the previous land auctions held in October 2007 and April 2008.
The recent auction saw 11 ninety-nine-year leasehold sites sold for over $500 psf, with two sites fetching a price of $620 psf and $640 psf each. The sites were offered as Phase Three of Sembawang Greenvale, located at Sembawang Road and Wak Hassan Drive.
The auction drew 97 registered bidders, compared to the 16 bidders at the previous auction in April 2008, according to the URA.
Since April 2008, landed properties have seen a 25 percent increase in their average prices, while average prices of non-landed properties climbed by just about one-tenth of that amount, said Nicholas Mak, executive director of SLP International Property Consultants. The demand for landed houses had also risen strongly for the last one-and-a-half years. “The pent-up demand coupled with the limited supply contributed to the strong bidding in today’s auction,” said Mr. Mak.
The sites could have also drawn more interest due to the new envelop control development guideline for landed property, which gives developers more flexibility in the projects’ design and development, as well as possibly some cost savings, added Mr. Mak.
All sites auctioned yesterday were strongly contested, with each plot drawing an average of 50 bids and one site drawing 159 bids.
Among the most competitive bidders were JBE Holdings, which won five of the 14 sites, and Fragrance Group, which won two sites, including the most expensive – a 40,860 sq ft plot that it paid for $26.15 million.
Analysts expect that landed home prices will climb more than that of non-landed homes in 2011 on the back of limited supply. “We can be sure that prices in that part of Sembawang, at least, will climb after today’s bids,” said a market watcher.