Published August 22, 2008

Cooling property market takes a seat at SLA auction

Only four of eight in-fill sites launched for residential use were eventually sold

By EMILYN YAP
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(SINGAPORE) The wait-and-see attitude that buyers have adopted in the cooling property market was evident at a Singapore Land Authority (SLA) auction yesterday.

All eyes only: 200 individuals and small developers packed a room at M Hotel, but there were only a few bidders

Some 200 individuals and small developers packed a room at M Hotel, but there were only a handful of bidders. Only four of eight in-fill sites launched for residential use were eventually sold, for a total of $13.81 million.

In-fill sites are pockets of state land in established landed housing estates that have been left untouched by nearby development or were once used for public purposes. All eight sites came with fresh 99-year leases.

'The response today was very cautious,' said auctioneer and executive director (auctions) at Knight Frank, Mary Sai. SLA conducted a similar auction for six sites last November but sold all the plots then.

Those at yesterday's auction told BT that opening prices were higher than expected. 'I think a lot of people were surprised - that's why there was not much bidding,' said retiree Anthony Tan Ho Peng.

Mr Tan won the bidding for a 4,720 sq ft three-storey bungalow plot in Glasgow Road for $710,000 or $150.40 per sq ft. Bidding started at $680,000, whereas Mr Tan had expected an opening price of $550,000.

According to SLA, the Chief Valuer decides reserve prices for sites, which cannot be awarded if bids are too low.

The timing of the auction - coinciding with the Hungry Ghost Festival or the seventh month of the lunar calendar - could have affected interest. But Ms Sai reckons this was not the main reason. 'Market sentiment is still weak,' she said. And high construction costs could be another concern.

While the auction did not generate heated competition throughout, one parcel received considerable attention. A 15,461 sq ft good class bungalow plot in Ridout Road attracted 34 bids, which drove the opening price of $7.31 million up steadily.

BreadTalk chairman George Quek eventually won the site for $8.96 million or $579.50 psf - the highest psf price of the four sites sold. Mr Quek told reporters that the land will be for his own use.

A three-storey bungalow parcel in Namly Avenue went for $2.63 million or $338.40 psf to Martha Lim. The 31-year-old CEO of Lim Seng Kok Contractor may also keep the 7,771 sq ft site for her own use.

A plot in Tanah Merah Kechil Road was sold for $1.51 million or $346.60 psf.

As for the unsold sites, SLA will work with the Chief Valuer to re-assess their prices. 'If we lower the reserve price, we could release (the site) subsequently,' said SLA's deputy director of land sales, Teo Jing Kok. Alternatively, 'if the feedback is that maybe the site is not popular and there are other in-fill sites, then we will release other sites'.

According to Mr Teo, SLA could hold one or two land auctions a year if market conditions remain steady.