Punggol EC site fails to draw any bid

Source: Business Times
12 Nov 08 (Wed)

NO bid was received for an executive condominium housing site - despite its being attractively located in Punggol - by the time the tender closed yesterday.

The 99-year leasehold site at the junction of Punggol Field and Punggol Road was launched for sale by the Housing & Development Board (HDB) on Sept 17.

Property analysts had said then that they expect lukewarm response from developers despite its location near Punggol MRT Station and the future Punggol Town Centre.

Nicholas Mak, director of research and consultancy at Knight Frank, predicted fewer than five bids.

When the tender closed at noon yesterday, there wasn’t a single taker.

‘The lack of interest in the site reflects the cautious sentiment in the market,’ said Eugene Lim, assistant vice-president of property firm ERA.

There is also now a problem in deciding how to price executive condominium (EC) flats, he said.

EC flats are thought to be a cut above HDB’s Design, Build and Sell Scheme (DBSS) apartments. With the DBSS scheme, developers have flexibility in designing and pricing the flats - but the homes are still public HDB flats in nature.

EC flats, on the other hand, are just a step away from private apartments as they come with condo-like facilities and land rights.

With DBSS flats now mostly going for $500,000-$750,000 each and mass market private homes selling for just a bit more than that, it is hard to find a pricing range for EC flats where they will be attractive to homebuyers, Mr Lim said. ‘EC flats target the same market as the DBSS flats - first-time homeowners and HDB upgraders.’

The 242,159 sq ft site is the fourth EC site the government put on the market this year.

Unlike the private residential property market, the HDB market is still going strong.

HDB’s resale price index rose 4.2 per cent in the third quarter. This means that in the first nine months of 2008, HDB resale prices climbed 12.4 per cent. The number of transactions also rose in Q3 to 8,110, from 7,760 in Q2.

Related post: No takers for Punggol EC site


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