15/12/2023
With the introduction of the GFA Harmonisation for development applications submitted to URA on or after 01 June 2023, developers costings will be increased by an average of 5% to 7% across the board. It also has the same meaning as spaces like balcony, air-con ledge, which was previously not under the GFA, is now counted as GFA.
The Jalan Tembusu GLS site which was won by Sim Lian at the close of the tender on July 18 2023, and affected by the GFA Harmonisation plan, was bidded at only $828.8 million or $1,069 psf ppr. (Tembusu Grand by CDL and MCL Land was $1,302 psf ppr)
Following that GLS tender results in August 2023, the next tender results showed that developers are starting to be more bullish in their bids. After factoring in construction costs, land costs, financing costs, marketing costs and professional fees, the breakeven psf ppr for
1. Lor 1 Toa Payoh GLS, RCR region, is $2,305 psf ppr, expected selling price ~$2,766 psf (20% profit)
2. Clementi Ave 1 GLS, OCR region, is $2,156 psf ppr, expected selling price ~$2,588 psf (20% profit)
3. Pine Grove (Parcel B) GLS, RCR region, is $2,120 psf ppf, expected selling price $2,544 psf (20% profit)
So what does this mean to consumers? Other than the fact that we will see prices hitting the $2,400 to $2,500 psf prices for OCR new launches in Clementi Ave 1 and $2,700 to $2,900 psf for the RCR Toa Payoh Lor 1 new launches, we know that developers are also adjusting to the current market forces, and they adapt and embrace the changes, and go for it.
Don't you think consumers should adapt and adjust to the new benchmark prices too?
