National Development Minister Mah Bow Tan said that the reserve bid prices for the sale of state lands will remain undisclosed to allow the determination of the site’s fair market value.
"If we were to reveal the reserve price for sale sites, then it may influence or distort the developers’ independent assessment of land prices and their bids, or deter some developers from bidding," said Mr. Mah, through a written statement in response to the question by Ho Geok Choo, MP for West Coast GRC.
The Singapore government uses the reserve price to decide whether a site from the Reserve List will be awarded or launched for sale when it is tendered out.
The Minister explained: "There have been instances in the past when we have both allowed the successful trigger of sites as well as the award of sites at bids below the Reserve Price."
He added that the Reserve List System is working as expected, with 13 sites successfully launched for sale during H1 of 2010.
It is the highest since the system started in H2 of 2001.
Changes to improve the Reserve List System for land sales were announced two months ago.
These changes include the launching of sites for tender if more than one bid comes close to the minimum asking price set by the government within a reasonable period.
"In short, the reserve price is not a strict minimum price for either the trigger or award of sites," Mr. Mah said.
Deposits paid by successful applicants for Reserve List sites would be reduced to three percent from five percent of the minimum price, capped at S$5 million.
The changes will ensure sufficient land for property developers by making the Reserve List System more attractive in the market.