http://www.straitstimes.com/archive/...awang-20140530

Conservative bids expected for EC site in Sembawang

Published on May 30, 2014 2:03 AM


EXPERTS anticipate conservative bids for an executive condominium (EC) site in Sembawang, rolled out under the Government Land Sales programme.

The 99-year leasehold site in Sembawang Avenue is able to accommodate 620 homes and has an area of 238,848 sq ft, the Housing Board (HDB) said yesterday.

It is on the confirmed list, which means that the parcel will go on sale regardless of interest.

If the results of tenders for two EC plots last week are any guide, the winning bid for the Sembawang plot is expected to be "conservative", experts said.

They expect moderate interest from developers, given its location and rules making it tougher for buyers to afford an EC - a hybrid of public and private housing.

SLP International research head Nicholas Mak said the Sembawang housing estate is a relatively quiet, non-mature neighbourhood.

Despite its distance from the Sembawang MRT station, the site could attract interest from developers that need to replenish land banks, he said.

The last tender for a site in Sembawang was in Canberra Drive, won by a tie-up between City Developments and TID Residential in January. The 2.85ha plot drew a cautious bid of $226 million - or $350 per sq ft (psf) per plot ratio (ppr) - after EC buyers were limited by government rules on using no more than 30 per cent of gross monthly income on mortgage payments.

Bids for two adjacent EC plots in nearby Yishun Street 51 also came in at the low end of expectations last week, on fears of a possible oversupply of such homes.

Some 6,000 units are in the pipeline from 10 EC sites that have been rolled out, experts noted then.

"With developers cutting prices (of new condos), they may be prepared to sell ECs at lower prices, so they have to bid realistically," said Mr Eugene Lim, key executive officer at ERA Realty.

But he added that ECs remain popular among upgraders living in HDB flats, and the new project could attract buyers from the locality.

Experts predicted that five to eight developers could make bids.

"The expectations of future property prices among some developers have fallen considerably," said Mr Mak. "As such, we expect the winning bid for the site to be a more conservative $300 to $340 per sq ft per plot ratio."

The tender will close at noon on July 10.

CHERYL ONG