EC land prices plunge to lowest since 2011

SINGAPORE — The price of land for executive condominiums (ECs) has fallen to the lowest in three-and-a-half years as developers curbed bids amid poor sales for the hybrid public-private housing type.

An EC plot in Anchorvale Crescent attracted only three bids by the close of tender yesterday, with Sim Lian Land submitting the top bid of S$157.8 million for the 187,830 sq ft site, the Housing and Development Board said.

With a maximum permissible gross floor area of 563,493 sq ft, the bid translated to S$280 per sq ft per plot ratio, well below analysts’ forecasts of S$320 to S$360 psfppr.

Mr Nicholas Mak, executive director of SLP International Property Consultants, said the bid is the lowest for EC land since July 2011, when a tender for a Punggol Field EC site closed at S$269 psfppr.

“The low participation rate among developers in this tender and the low bids illustrate the falling interest among developers for EC development sites due to the relatively poor sales in some of the recent EC launches. Based on the top bid in today’s land tender, the EC land price has returned to the level in mid-2011. This is perhaps another sign of a stabilising real estate market as a result of the government’s cooling measures,” he said.

If the tender is awarded to Sim Lian, the break-even price for the EC units in this future development is estimated to range from S$640 to S$660 psf, allowing the developer to undercut other EC projects launched in the vicinity, Mr Mak added.

The site is next to two other EC projects along Anchorvale Crescent that are being developed into Bellewaters by Qingjian Realty and The Vales by SingHaiYi.

The land price of Bellewaters was S$330.65 psfppr in May 2013, while that of The Vales was S$366.91 psfppr in February last year, Mr Mak said.

In addition, there were 1,580 EC units that were still unsold as at the end of last year in developments within the Sengkang and Punggol planning areas, he noted.

Demand for ECs was hit after changes late in 2013 that included the introduction of a mortgage servicing ratio and resale levies for second-time applicants.