Four newly released residential sites to receive ‘so-so’ bids

The moderate developer interest is backed by an expected keen buyers’ interest for ECs, which not only cater to the traditional sandwich class, i.e. households earning between $8000 to $1000 per month, but also new qualifying buyers in the $10,000 to $12,000 income per month bracket, who are likely to consider ECs in lieu of private condominiums in the face of wider economic uncertainties and a slowdown in Singapore’s economy.

Although a moderated economic condition going ahead can potentially stabilize private residential prices and may be an opportune time to purchase properties, buyers’ sentiments and financing confidence will be increasingly realistic, thus encouraging more genuine owner occupier buyers to opt for lower cost alternatives like ECs.

However, while more developers will be open to EC development, the bid (prices) submitted are likely to be realistic and unlikely to be excessively optimistic. This is in line with a general cautious economic and property environment, even if the condition is generally far from pessimistic. Had the recent revisions in income ceiling been introduced in a better economic climate, it may not necessarily see the desired effect of diverting as many homebuyers to lower cost alternatives like ECs or HDB flats, as solid economic fundamentals can strengthen homebuyers’ confidence notwithstanding prices are relatively high.
 

Developer interest for these 2 condominium sites is expected to be fairly modest, underpinned by various demand-side reasons, particularly an expected slowdown in Singapore’s economy arising from uncertainties in the wider economy such as the Euro-zone and US crisis and an expected temporary slowdown in private homebuying sentiments.

However, Singapore’s economy may not be excessively negatively affected as there are also opportunities for funds to be diverted to the Asia pacific region, including Singapore, as investors flock to a stable platform to grow their investments. Singapore has also developed significantly over recent years with the completion and on-going development of various lifestyle clusters (including the integrated resorts) and suburban areas planned for rejuvenation.

Additionally, both sites already have adjacent residential site sold recently, posing competition for the subject development. Nevertheless, there may be some developers who take a strategic view that each of these areas can be developed into a residential enclave of critical mass with synergizing residential developments.