Tender closing for Sumang Walk executive condominium site
Mr Ong Teck Hui, National Director, Research & Consultancy
At $583 psf/pr, it is a stunning top bid for the subject parcel which is way above market expectations and also a record executive condominium (EC) unit land price. This is also 64% higher than the top bid of $355 psf/pr for the Anchorvale Lane site in August 2016, which was the last EC tender.
The absence of EC land tender for one and a half years, a severely undersupplied market with a paltry unsold stock of less than 1,000 EC units and a rising private residential market are contributors to the bullish outlook for the EC market among bidders.
The top bidder’s break-even cost is estimated at close to $1,000 psf which is above the recent new EC transactions in the area. A few transactions at The Vales in recent months averaged $860 psf. There seems to be an assumption that EC prices will rise by more than 20% by the time the project on the subject site is launched.
On the other hand, the bids for the site could have taken the cue from future launch prices of suburban private condominiums at $1,300 to $1,400 psf with a 15% to 20% discount for ECs.