Less is better says many in the property industry with regards to the Singapore government’s land sales program or (GLS), which will have its 2008 H2 announcement soon. The reasons are obvious, market sentiment has cooled since the end of 2007, and the market has made it clear to the government that unless it is a choice location, they are not going to put in bids for those sites. It was proven in the Westwood Avenue, a landed property site (in Jurong West), which drew only 2 bids and the top bid was $78 psf per plot ratio, which is a far cry from $305 for a condo site facing West Coast Park and had views of the sea.

Sites with strong selling points will draw keen interest from property developers. It is obvious that developments with panoramic sea and city views, close proximity to MRT, and town centers will command premium bids. Sites that are unattractive may draw less bids, and bids that are too low for the Ministry of National Development (MND) to award the tender. This has an impact on the current residential property market which has been fairly muted since early this year.

In my opinion, if the MND continues to release land blatantly, and wantonly, it will not only hurt the market, but may sell land at depressed prices. If the people at MND are worth their salt, they will not go down this path. If the govnerment is trying to use land sales to ensure that there is sufficient properties to meet market demand, would not be necessary, because there are still many medium price range properties available in the market. We will probably revisit this issue at a later date as more news from the MND is released.