The property market in Singapore is showing promising signs of growth as 3Q 2023 witnessed a surge in prices. Furthermore, the strong response to project launches in November 2023 has boosted developer confidence, resulting in competitive bids for Government Land Sales (GLS) sites. In particular, three GLS sites—Clementi Ave 1, Pine Grove (Parcel B), and Lor 1 Toa Payoh—have garnered considerable attention.
Clementi Ave 1 and Pine Grove (Parcel B) Sites
Clementi Ave 1 and Pine Grove (Parcel B) sites proved to be attractive propositions, drawing the interest of six and three bidders, respectively. However, the proximity of these sites may have led to some developers choosing one over the other.
Clementi is a coveted location, known for its excellent schools, ranging from primary to tertiary institutions. Project launches in this area have traditionally seen robust demand. Notable examples include Clavon, which sold 70% of its units on launch day in 2020, Parc Clematis, with 70% of units sold in 2019, and The Clement Canopy, which achieved an impressive 80% sales on its first day in 2017.
Lor 1 Toa Payoh GLS Site
Lor 1 Toa Payoh's GLS site garnered a strong bid price, in part due to the absence of a GLS site for private housing in this popular HDB estate for eight years. The potential pent-up demand for homes in Toa Payoh, coupled with a lack of competition, contributed to the competitive bid.
Previous project launches in Toa Payoh, such as Gem Residences and Trevista, demonstrated the estate's appeal to buyers. This track record indicates the strong potential for the Lor 1 Toa Payoh site.
What's Driving the $2,600 to $2,900 psf Price Range?
The bid prices for these sites indicate their appeal. A comparison of Lor 1 Toa Payoh and Grand Dunman site bids highlights this trend:
- Grand Dunman: Land Bid at $1,350 psfppr
- TPY Lor 1: Land Bid at $1,360 psfppr
Both of these sites are located in the Rest of Central Region. Interestingly, 1 and 2-bedroom units at Grand Dunman have already transacted for more than $2,800 per square foot.
Considering the increased labor costs and URA's harmonization of floor area, it's conceivable that Lorong 1 Toa Payoh will see prices in the range of $2,600 to $2,900 per square foot during its upcoming launch next year.
In Summary:
- A surge in property market prices in 3Q 2023 and strong project launches in November has boosted developer confidence.
- Three GLS sites, including Clementi Ave 1 and Lor 1 Toa Payoh, attracted competitive bids.
- Clementi's popularity, driven by its schools and previous successful launches, contributed to high interest in the area.
- Lor 1 Toa Payoh's site, which had been eight years since the last GLS sale, received strong bids due to pent-up demand and limited competition.
- Competitive land bids indicate a potential price range of $2,600 to $2,900 per square foot for Lorong 1 Toa Payoh.
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