Below is an analysis of the Lentor and Bukit Batok government land sale.
On 16 September 2022, the Urban Redevelopment Authority (URA) announced the results of 3 government land sales – Lentor Central and Lentor Hills Road (Parcel B) for private condos, and Bukit Batok West Avenue 5 for executive condos.
All three sites saw more muted interest with only 3, 2 and 4 bids for respective sites. This could be due to caution over rising construction costs and interest rates amid heightened global inflationary fears. The top bid for the three sites are:
- Lentor Central – S$1,108 psf ppr
- Lentor Hills Road (Parcel B) – S$1,130 psf ppr
- Bukit Batok West Avenue 5 – S$626 psf ppr
Lentor Government Land Sale Sites.
For the two Lentor sites, although they were lower than Lentor Modern’s land cost of $1,204 psf ppr, they were higher than the nearby Lentor Hills Road (Parcel A) site that was sold in January for $1,060 psf ppr. Thie site will be developed into Lentor Hills Residences.
They are also higher than the government land sale for the Dairy Farm Walk site sold in March this year at a land rate of $980 psf ppr.
As for the Bukit Batok West Avenue 5 site, the land rate was 5.4% lower ($626 psf ppr) than an adjacent executive condo (EC) site in Bukit Batok West Avenue 8 sold at $662 psf ppr in March 2022.
This is also 5% lower than the Tampines Street 62 EC site at $659 psf ppr achieved during the government land sale in July 2021. This new development offering about 590 residential units will be known as Tenet EC. It will be jointly developed by Qingjian Realty and Santarli Construction.
Lentor Estate Land Sale And Housing Supply
Meanwhile, the cautious bidding for the two Lentor sites can also be attributed to supply concerns as the government accelerates the development of the new Lentor Hills Estate.
Besides Lentor Modern, which offers 605 residential units, the other upcoming developments will add about 2,335 more units to the area, or 2,940 units collectively. The following is a breakdown of the potential number of residential units on offer:
- Lentor Modern – 605 units
- Lentor Hills Road (Parcel A), or Lentor Hills Residences – 595 units
- Lentor Hills Road (Parcel B) – 265 units
- Lentor Central 1 – 470 units
- Lentor Central 2 – 475 units
- Lentor Gardens – 530 units
Bukit Batok Land Sale And Housing Supply
Although the latest tender for the executive condo (EC) site at Bukit Batok West Avenue 5 was 5.4% lower at $626 psf ppr compared to the adjacent Bukit Batok West Avenue 8 EC site ($662 psf ppr), it is still higher than the $603 psf ppr for the Tengah Garden Walk site sold in June 2021.
The two Bukit Batok sites are expected to offer about 495 and 375 residential units respectively.
The Tengah Garden Walk project is expected to be launched around October 2022. Known as Copen Grand, it will be jointly developed by City Developments and MCL Land. Offering 639 units of 2- to 5-bedrooms, it is expected to be well received due to its location within walking distance of three MRT stations – Tengah, Hong Kah, and Tengah Plantation. It will also be built in Singapore’s first sustainable and smart township.
Hence, sentiment is unlikely to be too affected by the relatively muted demand for North Gaia executive condo when it was launched in April at a median price of $1,303 psf. One reason may be due to its less favourable location as the Yishun MRT station and integrated transport hub are three bus stops away.
Besides the above-mentioned executive condos, there will be another coming up at Tengah Plantation Loop. The government land sale (GLS) is estimated to take place in December 2022, with the development expected to offer about 495 residential units.
But given that housing developers can only put an EC up for sale 15 months after buying the land or completing foundation works, whichever is earlier, it is likely to be launched only around the middle of 2024 or later.
Conclusion
Despite the cautious bidding in recent government land sales (GLS) due to economic headwinds, heightened inflationary pressures and rising interest rates, land prices have held relatively firm thus far.
With resale prices of HDB flats rising for 26 consecutive months in August, this is expected to underpin the private residential property market due to demand from HDB upgraders.
In addition, with the inventory of unsold private residential units at a multi-year low of 13k-14k, the increase in land supply is unlikely to affect sentiment too drastically. Moreover, any sharp correction in the property market will likely prompt the government to calibrate its housing policies to prevent any hard landing.
In fact, the slew of property cooling measures over the years have weeded out much speculation while ensuring financial prudence. Hence, most property buyers or owners today are in a better position to ride out any economic storm.
Recent strong sales of Amo Residence, Sky Eden and Lentor Modern is a testament to the still buoyant sentiment. Nevertheless, with new private property launches hitting an average price above of $2,100 psf in the Outside Central Region (OCR), some price resistance may creep in.
Hence, it will not be surprising if property buyers re-assess their risk appetite and consider investing in an executive condo (EC) instead where prices are significantly more affordable and are selling around $1,300 psf.
If you are considering investing in an executive condo, please refer to our EC FAQs to have a better understanding of the eligibility criteria. You may also wish to take a look at our property review of new launches.
Alternatively, please feel free to WhatsApp or Email me if you have any queries about property investment.
