SINGAPORE: For the first time in over two decades, a Singapore housing site gets zero bids.
The government housing site failed to attract any interest from developers, marking a significant downturn in the city-state’s property market, which has been struggling with soaring residential rents.
The Upper Thomson Road site was part of the government’s plan to introduce long-term serviced apartments.
These apartments were intended to have a minimum stay of three months, a substantial increase from the current seven-day requirement.
This pilot project was aimed at addressing the persistent rise in residential rents, which have been near multi-year highs despite some recent cooling.
Yahoo News reported that the lack of bids on the Upper Thomson Road site is seen as a significant setback for these efforts.
Developers appear to be exercising caution amid a combination of falling new home sales, subdued foreign demand, and broader economic uncertainties.
CBRE Group Inc. highlighted that this is the first instance in over two decades where such a site has failed to attract bids.
For developers, “market sentiment is weak, and caution rules the day,” commented Nicholas Mak, chief research officer at Mogul.sg.
Singapore Business Review also reported that Leonard Tay, Knight Frank’s research head, commented on the unexpected lack of bids for the Upper Thomson Road (Parcel A) site, noting that it was “not expected but not entirely surprising.”
According to Mr Tay, “The long-stay serviced apartment concept in the central area of the island has yet to be tested, let alone in a suburban area.”
He suggested that “the current economic climate may have deterred interest in developing such properties.”
Wong Siew Ying, Head of Research and Content at PropNex, shared a similar view, indicating that developers may be hesitant due to uncertainties surrounding the demand for long-stay serviced apartments in this location, which is not in close proximity to major commercial hubs.
She noted, “Overall, we expect caution to prevail, as there could perhaps be some uncertainty about the depth of the private housing demand after the slower sales in 2023 and the relatively lacklustre transaction volume in recent months amid limited project launches.”
New home sales in Singapore declined for the second consecutive month in May, with only 221 units sold compared to 278 units in April, the lowest monthly sales figure for May since 2008.
Another pilot site, located on the outskirts of the city centre, managed to attract only one bid, which was accepted in April.
/TISG
Read also: Tanjong Rhu Riverfront I & II to draw the most interest in June BTO launch
Featured image by Depositphotos