The recent Government Land Sale (GLS) sites at Jalan Loyang Besar and Margaret Drive, which closed their tenders on August 1st, 2024, have generated significant interest in the real estate market. While the Jalan Loyang Besar site attracted four bids, the Margaret Drive site received only two, revealing intriguing dynamics in developer sentiment and potential buyer preferences.
Site #1: Jalan Loyang Besar
The GLS site at Jalan Loyang Besar, located in the Pasir Ris Planning Area (District 18), is the only executive condominium (EC) site on the Confirmed List for the GLS program in 1H2024. It is expected to yield around 710 units, with a permissible gross floor area (GFA) of 764,395 sq ft.
Several factors make this site highly attractive:
- Strategic Location: Situated near Downtown East and various amenities such as Pasir Ris Central Hawker Centre, Pasir Ris Sports Centre, and Pasir Ris Park.
- Educational Institutions: Proximity to reputable schools like Casuarina Primary School and Pasir Ris Primary School.
- Strong Historical Demand: There are three ECs within a 500m radius, with strong demand for new ECs indicated by the successful launch of Tenet EC in 2022, which achieved a take-up rate of 72.3% during its launch weekend.
The Jalan Loyang Besar site saw the highest bid from a consortium led by Qingjian Realty, which was also the developer behind the Tenet EC. The top bid was $729 psf ppr, significantly higher than the $659 psf ppr for the Tenet site in 2021, reflecting strong developer confidence in the continued demand for ECs in this area.
Site #2: Margaret Drive
In contrast, the GLS site at Margaret Drive, located in the Queenstown Planning Area (District 3), received only two bids despite its excellent locational attributes. The site, which can yield 460 units with a GFA of 430,495 sq ft, is centrally located near Queenstown MRT Station, the Alexandra Canal Linear Park, and several educational institutions.
Key considerations include:
- Prime Location: Central location with easy access to amenities and public transportation.
- Development Potential: Smaller site with fewer units, which generally presents a lower development risk.
- Price Dynamics: The strong price growth in District 3, where new 99-year leasehold condos have seen a 61.7% increase since 2013, reaching an average price of $2,826 psf this year.
However, the Margaret Drive site attracted fewer bids, which can be attributed to the higher price points and lower affordability of condos compared to ECs. With new leasehold condos averaging $2,301 psf, significantly higher than the $1,431 psf for new ECs, the affordability of ECs remains a compelling factor for many homebuyers.
Summary Highlights:
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Jalan Loyang Besar:
- 710-unit EC site in Pasir Ris.
- Highest bid: $729 psf ppr.
- Strong demand for ECs, supported by historical trends.
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Margaret Drive:
- 460-unit condo site in Queenstown.
- Only two bids received.
- High price growth in District 3, but lower affordability compared to ECs.
Interpretation of the News:
The differing responses to these two GLS sites underscore the varying developer strategies and buyer preferences in Singapore’s residential market. The strong bidding for the Jalan Loyang Besar site highlights the ongoing demand for affordable housing options like ECs, especially in mature estates like Pasir Ris. Conversely, the limited interest in the Margaret Drive site, despite its prime location, suggests that developers are becoming more cautious with high-priced projects in the current market environment.
For prospective homebuyers and investors, these developments indicate that ECs remain an attractive and more affordable entry point into the private residential market. Meanwhile, while prime locations like Margaret Drive offer potential for long-term capital appreciation, buyers should be prepared for higher upfront costs.
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