The recent bid price for the Kampong Java Road site next to Newton MRT Station has surprised analyst a bit with the low bid price that was secured for the plot of land. Despite the location being next to Newton MRT Station as well as near to Newton Food Centre, the top bid of $1,192psf ppr was secured by CELH Development which is a unit of Chip Eng Seng and CEL Development. The low bid of 1192psf ppr was in sharp contrast to the bid price that was secured in Fourth Avenue Residences by Allgreen Properties which was $1,540 psf ppr as well as $1,733 psf ppr paid by Frasers Property for the Jiak Kim Street site in Dec 2017.
Top Bid of $1,192psf ppr secured for Kampong Java Road Site
The relatively low land bid of $1,192psf ppr was partly attributed due to the minimum size tender conditions that was attributed by the Government Land Sales Programme which dictated that the average size of the development is to be set at 85sqm which was higher than the previously set condition of 70sqm. This is to limit the number of units to be built around the mature area of newton and to set in motion that housing is meant primarily for own stay and not for investment and hence the increase in minimum size would mean that developer would have to built more units for own stay and a larger size for more family staying rather than for investments.
Therefore, the units at the new development Kopar at Newton will be bigger and more spacious. The price submitted would also mean that the breakeven price for the development is set at only $1,700psf and therefore there is a huge margin for the developer given the spacious plot of land as well as the location.