In October, another opportunistic bid was snubbed by URA. It was the fifth ‘sole bid’ that was rejected by URA. More frequent rejections by URA in its tender exercises, as well as more instances of sole bids received at respective tender exercises are symptomatic of a waning market.

[F.1] Two bidders for Ubi industrial site

In the state land tender of an industrial site at Ubi Avenue 4 in early October 2008, the URA received only two bids for the 123,693 sq ft site which has a maximum plot ratio of 2.5.

Eventually, it was Sim Lian Land which won the award at $26.3 million, or about $85 per sq ft per plot ratio (psf ppr). The winning bid was 13.6% higher than the only other bid of $75 psf ppr.

[F.2] Only one bid for URA industrial site at Kallang Pudding

The URA tender for an industrial site on Kallang Pudding Road received only one bid in early October 2008.

Orion-Four Development has put in a $10.8 million bid for the 61,819 square feet site with a 2.5 plot ratio. If awarded, the developer’s cost will be around $69.88 per sq ft per plot ratio (psf ppr). It will be much cheaper than the $85 psf ppr Sim Lian had paid for the Ubi Ave 4 industrial site earlier this month.

The previous successful bid prices for leasehold industrial sites in the vicinity were $88.74 psf ppr for a 60-year leasehold industrial site at Ubi Avenue 4/Ubi Road 2 in March 2008; and $142 psf ppr for an industrial site in Playfair Road in Ubi/Paya Lebar/Eunos area in February 2008.

[F.3] Sole bid for URA hotel site at Kallang/Jellicoe

A Hotel 81 subsidiary has put in the sole bid of $51 million for the hotel site at Kallang Road/Jellicoe Road in a state land tender conducted by the URA. If awarded, the developer’s costs will be around $249.56 per square foot per plot ratio (psf ppr).

With a plot ratio of 4.5, the future hotel will have a permissible gross floor area (GFA) of 204,363 sq ft.

[F.4] Tanah Merah condo site received keen bids

A 99-yr lease condo site next to Tanah Merah MRT attracted seven bids when it was put on sale by the URA. The top bid of $84 mil or $282 psf was from TID, a joint venture between Hong Leong Group and Japan's Mitsui Fudosan.

The 106,299 sq ft plot has a 2.8 plot ratio and can be developed into a condo with 240-250 units averaging 1,200 sq ft. The breakeven cost for a new condo is likely to be $700-750 psf, translating to possible sale prices ranging from $800-850 psf.

[F.5] Opportunistic bid for Mohd Sultan office site rejected

URA has snubbed the sole bid - submitted by RSP Architects Planners & Engineers - for a transitional office site in Mohamed Sultan Road, citing low tender price.

The sole bidder has put in an opportunistic bid of $4.65 million, which was equivalent to $46.67 per sq ft per plot ratio (psf ppr). The site area is 66,482 sq ft with the maximum permissible gross floor area (GFA) of 99,727.5 sq ft.

Despite the general gloom in the private property sector, the HDB resale market is a picture of boom in Q3 of 2008. Below shows the encouraging statistics, including:

• The HDB resale price index rose by 4.2% in Q3 when compared with Q2.
• Resale transactions rose by about 4% in Q3 to 8,110 cases, from about 7,760 cases in Q2 2008.
• The overall median transacted prices for HDB resale flats are also on a steady climb (see table[7]).

[G.1] Cash-Over-Valuation (COV) dropped as resale volume rose

The overall median Cash-over-valuation (COV) prices also dropped, except for 3-room flats. As the resale prices and resale transaction volume rose, the cash portion reduced correspondingly. This may be a result of HDB market valuation prices being more responsive to the market condition.

Cases requiring COV constituted 89% of all resale transactions in Q3, with 11% of resale flats sold at or below valuation.

[G.2] HDB flat dwellers’ share of private home purchases rose to 34%

HDB upgraders' share of private home purchases rose to 34% in Q2 2008 from 28% share in Q1 2008. This is the highest quarterly figure in at least three years. For instance, in absolute terms in Q2, HDB upgraders picked up the most number of units in The Verve in the Balestier area - 36 - followed by 32 at Stadia at Yio Chu Kang Road in the primary market (from developers). Proportionately, The Quartz was the most popular with 86% of its buyers being previous HDB flat dwellers.

HDB upgraders have also been more active in Q2 in the secondary market, where prices have dropped by as much as 10 to 12 % in Q2 2008 over Q1 2008 in some instances. The number of private apartments/condos changing hands in the subsale market bought by those with HDB addresses increased 52% Q-on-Q to 152 deals in Q2 2008.

[G.3] Sub-letting rents movement uneven in Q3

For HDB flats whose owners have received the approval from the authority for ‘whole flat subletting’, the overall median rents rose by between $50 and $100 for different flat types in Q3. However, when compared to the same quarter of last year, the increase in the overall median rents was more pronounced by between $200 and $400 for different flat types.

However, subletting transactions fell about 4% from about 4,120 cases in Q2 to about 3,960 cases in Q3.

The total number of HDB flats approved for subletting rose to about 21,400 units, compared to about 20,200 units in Q2.

[G.4] Resale transaction in October 2008 dropped by 105 cases

The total resale HDB flat transactions in October dropped by 105 cases (or 4.21%) to 2,389 transactions. When compared with October 2007, this October’s performance was also poorer by 74 transactions. A couple of reasons may have contributed to the drop in HDB resale transactions, including:

(4.1) The stock market turmoil in October 2008 may have terrified some prospective buyers into a more reflective mood. After all, this was one of the worst stock market meltdown in three decades.

(4.2) Over the past one year, the absolute price quantum of resale flats has gone up by more than 10% across the board (see table 8), and many prospective buyers might have been put off by the high asking prices. This can be seen from the even drop pattern involving all flat types (see shaded portion of Table [9]).

The percentage drop in 3-room flat transactions was 2.45%, while the drop for the other flay types are 2.71% for 4-room flats, 7.83% for 5-room flats, and 4.71% for E-flats.

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