‘Flattish pricing’ seen for future developments on three URA sites: DBS

Homes on the Canberra Crescent site could sell for under $2,000 psf.

Future homes on the three recently tendered sites will likely be priced cheaper than usual after bids came in lower than expected.

DBS Group Research said winning developers will likely adopt “flattish pricing” strategies for their future projects, taking into account the relatively cheap land rates and higher construction costs.

One of the cheapest is the $793 psf ppr top bid for Canberra Crescent. Should this be awarded, DBS said future homes on the site could sell for less than $2,000 psf considering a breakeven cost of $1,500 to $1,600 psf. 

“We reckon that the developer will be targeting the upgrader class of buyers and, given the low land rate,” it said.

With a top bid of $841 psf ppr for De Souza Avenue, DBS said the future project on the site could fetch launch prices near the $2,000 psf mark or even lower, with a breakeven cost of $1,650 to $1,750 psf. This will make the project one of the cheaper new developments.

Zion Road (Parcel B), with a land cost of $1,304 psf ppr, could command higher prices estimated at $2,600 to $2,800 psf – a pricing that could provide comfortable margins to the developer, according to DBS.