When the government land tender for an Executive Condominium (EC) site in Canberra closed on Oct 1, developer participation and the top bid price far exceeded market analysts' initial expectations.
In the lead-up to the close of this tender, market watchers had broadly expected a relatively tepid response by developers.
This is because the eventual project is the first new EC that will go to market under tightened EC rules. This includes a doubling of the minimum occupation period (MOP) to ten years, the removal of the deferred payment scheme, and an increase in the first-timer priority to 90%.
In addition, it will also be the first EC project under the higher $18,000 monthly household income ceiling, announced during this year's National Day Rally.
This is why some analysts like Wong Siew Ying, Head of Research and Content at PropNex, pointed out that developers had to price in both changes while assessing the tender, with the set of measures potentially dampening interest in the site.
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A record land price for an EC site
The top bid of $163.9 million for the 124,166 sq ft site is equivalent to a land rate of $825 psf per plot ratio (ppr). Most analysts expect that the new EC could be priced from $1,900 psf.
If it is awarded to the top bidder - a four-way joint venture comprising Santarli Realty, Kay Lim Holdings, Heeton Holdings and Sunray Group Holdings - it would mark a new record land price for an EC site.
It's also the latest indication that rising land prices in the last two to three years have translated into higher new launch prices, especially in the EC segment where price expectations now exceed $1,700 psf.
The Canberra EC site, which is located on Canberra Drive in District 27, saw 13 property developers and joint ventures participate in the tender. It has been eight years since we last saw such a highly contested EC site.
In February 2018, a government land sale (GLS) site for an EC development on Sumang Walk garnered a record 17 bids when it closed. City Developments Ltd (CDL) and its joint venture partner TID submitted the top bid of $509.37 million ($583 psf ppr) for that site.
At the time, it was the largest bid price for an EC site, leaping over the previous high of $486 million ($556 psf ppr) by nearly 5%.
CDL and TID would develop that Sumang Walk site into Piermont Grand, an 820-unit development that launched for sale in July 2019. The project sold 46% of its units during its initial sales weekend and set an average selling price of $1,080 psf.
Bids received for the Canberra Drive EC site
| Developer | Bid price ($) | Bid Price ($PSF ppr) |
|---|---|---|
| Santarli Realty, Kay Lim Holdings, Heeton Holdings and Sunray Group Holdings | 163,903,000 | 825 |
| Hong Leong Holdings and TID | 159,434,000 | 803 |
| Apex Asia, BHCC Development and HSB Development | 158,600,000 | 798 |
| Chan Rong Fen Construction and BS Capital Group | 153,000,000 | 770 |
| City Developments Ltd | 146,099,999 | 735 |
| Kheng Leong Co. | 141,050,000 | 710 |
| EL Development | 135,100,000 | 680 |
| Evia Real Estate, Arc Canberra and H10 Holdings | 130,500,999 | 657 |
| Master Contract Services | 129,330,000 | 651 |
| Macly Group, Roxy-Pacific Holdings, Lin Bing Cheng of LWH Holdings, Kimly Group and HLBC | 127,198,889 | 640 |
| JBE Capital | 124,365,380 | 626 |
| Forsea Holding, Qingjian Realty and Jianan Realty | 123,777,000 | 623 |
| Sim Lian Group | 71,718,787 | 361 |
The strong participation in the Canberra EC site suggests that some developers seem unfazed by the fact that the longer ownership requirement and removal of the deferred payment scheme are not enough to deter aspiring EC homebuyers.
There might have even been a bit of reverse psychology going on, with Wong suggesting that the tender drew livelier participation because the new EC measures were expected to make bidding more cautious, giving developers reason to take part on the chance that a more moderate bid might succeed.
The relatively less competitive bids put forward by seven developers may have reflected this sentiment. We saw seven bids that came in below the $692 psf ppr that Oriental Pacific Holdings paid for a nearby EC site along Sembawang Road, in a tender that closed last September.
However, Wong also suggests that the moderate bids by these developers could equally reflect their own view of what the site is worth.
Canberra's catchment of upgraders
Although some developers may have hoped to sweep up the site by putting in a relatively moderate bid price, the participation of several well-capitalised developers is an indication that interest in the EC segment remains healthy despite the changes to the EC scheme, says Mohan Sandrasegeran, Head of Research & Data Analytics, SRI.
He points out that the $825 psf ppr bid by the Santarli-led consortium is 12.7% higher than the recent EC bid for a site at Miltonia Close. That tender only drew three bids, with Hoi Hup Realty submitting the top bid of $732 psf ppr ($340.9 million).
"The relatively close positioning of the leading bids could also suggest that several developers arrived at broadly similar assessments of the site's development potential and the underlying depth of demand for new EC housing in the Canberra and wider northern region," says Sandrasegeran.
He adds that the surrounding area has progressively matured over the years, supported by new housing developments, transport infrastructure and an expanding range of amenities.
The latest EC site is also situated near existing amenities such as Canberra Plaza, Sun Plaza, and a range of neighbourhood retail and dining options.
The opening of Canberra MRT station in 2019 greatly enhanced the public transport connectivity in Canberra, which had been seeing several new Build-To-Order (BTO) projects and EC developments. Some familiar projects there include Canberra Residences, The Visionaire, and The Brownstone.
Sandrasegeran says that the catchment of residents from the new BTOs and older ECs provides the future EC project with an existing residential catchment from which upgrader demand could potentially emerge.
The tender for the latest EC site in Canberra will be a useful benchmark for how developers assess EC land values under the new framework, says Sandrasegeran. "Subsequent EC tenders will provide further indication of whether bidding strategies and land valuations have materially adjusted as developers become more familiar with the revised market parameters."
Upcoming EC tenders may still see a more tempered response
So far, buyers have responded with much enthusiasm to each new EC project, despite the fact that average new launch prices have been on a steep upward climb for the past seven years.
The first new EC project this year, the 748-unit Coastal Cabana, sold 66% of its units during its opening sales weekend. The Pasir Ris project was also able to achieve an average selling price of $1,734 psf.
It was followed shortly after by the launch of Rivelle, a 572-unit development in Tampines West. The project is one of the best-selling projects this year, moving 92.5% of its units and setting an average selling price of $1,893 psf.
A further three EC projects were due to launch this year - Senja Close, Woodlands Drive 17, and Sembawang Road - but after the adjustment to the EC scheme, their developers now seem to target a launch in 2027.
Upcoming EC projects
| Project/GLS site | Est. units |
|---|---|
| Wynwood Grand (Woodlands Drive 17, 1H 2025) | 420 |
| Sembawang Road | 265 |
| Woodlands Drive 17 (2H 2025) | 560 |
| Miltonia Close | 430 |
| Canberra Drive | 185 |
| Admiralty Walk (formerly Sembawang Drive) | 450 |
Eugene Lim, Key Executive Officer of ERA Singapore, says that despite the strong turnout, the sizeable spread of 128.5% between the highest and lowest bids (for the latest Canberra EC site) reveals the vastly differing outlooks for future EC reception among developers.
"The strong turnout this time does not mean caution has been thrown to the wind for future EC tenders. Developer participation will still likely hinge on upcoming supply and site-specific attributes, alongside the new EC rules," he says.
Upcoming EC projects which will be closely monitored are Wynwood Grand and upcoming projects at Sembawang Road, Woodlands Drive 17, Miltonia Close, and Canberra Drive.
Collectively, these projects could add about 1,860 new units to the EC pipeline. "As such, developers are likely to keep this supply wave firmly in mind before throwing their hat in the ring for the Admiralty Walk EC site," says Lim.
He adds that rising interest rates and a softer domestic job market could likewise dampen homebuying sentiment, which may encourage developers to exercise greater restraint at upcoming tenders.
Has this upended the government's plan to cool the EC market?
Some market analysts, like Nicholas Mak, Chief Research Officer at Mogul.sg, suggest that the record land price is a sign that despite interventions by the government, prices in the EC market will continue to climb uninterrupted.
The median transacted price of new EC units has increased steadily over the last 15 years, to reach a median price of $1,849 psf in 3Q2026, according to figures cited by Mak. This price growth reflects a 165% price appreciation over the 15 years.
"The (Canberra EC) site can yield a relatively small number of EC units, numbering about 185 units. Developers are confident that they can sell all the EC units in this small development within the ABSD deadline and still make a decent profit, even with the tighter EC rules," says Mak.
In short, developers are betting that the effect of the increase in income ceiling will more than negate the cooling effect of the 10-year MOP for EC units.
He estimates that based on the land price, the new EC units built on the land parcel at Canberra Drive could see median prices ranging from $1,850 psf to $1,920 psf, when the development is launched next year.
At that price range, there is a strong likelihood that it will be at the higher end of prevailing new launch EC prices.
In contrast, the median prices at recent EC projects have been: Rivelle Tampines ($1,934 psf), Coastal Cabana ($1,795 psf), Otto Place ($1,758 psf), and Aurelle of Tampines ($2,052 psf).
Looking ahead, it looks to me that we are fast approaching the point where we need to have serious discussions about the possibility that new launch EC prices of $2,000 psf are just around the corner.
Watchful EC buyers might be spooked that this housing option is moving further away from their affordability, and the private residential market is not holding back in terms of price growth as well.
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