Developers Bid Aggressively at GLS Tenders Despite Energy Crisis — Why Their Faith in Singapore May Pay Off

The Kallang Close private-housing site near Kallang MRT station drew four bids, with Frasers Property and Mitsubishi Estate securing it for S$610.75 million — about S$1,415 per square foot per plot ratio. The land parcel has a maximum gross floor area of 431,615 square feet, some of which will be used as a childcare centre, and can yield about 470 homes. Gross development cost could be in the region of S$1 billion, and the average selling price may need to be close to S$3,000 psf to generate a net profit margin of about 10 per cent.

Separately, a Miltonia Close executive condominium site in Yishun next to Orchid Country Club drew three bids, with Hoi Hup Realty placing the top bid of S$340.85 million — about S$732 psf per plot ratio. This site can generate about 430 homes and is several bus stops from the Khatib MRT station.

Given the economic pain unleashed by the energy crisis, the question is whether developers are being foolhardy by taking on big-ticket housing projects at elevated land prices.

Five Government Land Sales private housing sites have completed tendering so far in 2026. Competition has been fierce, with tender prices generally higher than in previous years and in some cases refreshing regional benchmarks.

CBRE’s Song Ming Hui has noted that overall tender prices were at or above expectations for suburban and regional sites, with some exceeding projections. This is largely driven by strong new launch sales performance, which has given developers confidence to bid aggressively.

Despite the energy shock and its potential to raise inflation, slow growth, and increase construction costs, developers’ bullishness on housing sites is underpinned by several factors.

First, on the supply side, GLS sites offer more certainty on timing and acquisition compared with collective sale sites, where strata owners may object. A buyer of a GLS site can carry out work expeditiously within five years to avoid ABSD remission clawback — which ranges from 25 per cent for projects with 99 per cent of homes sold, to 35 per cent for those below 90 per cent sold.

On the demand side, the government’s track record of completing key amenities such as new MRT stations on time, its measured approach to releasing confirmed-list GLS sites at pre-determined dates, and Singapore’s nearly 80 per cent homeownership rate all support a resilient buyer pool. In the GLS programme for the first half of 2026, confirmed-list sites can yield about 4,575 private homes, including 635 EC units — broadly similar to the 4,725 private homes in the second half of 2025.

Perhaps most importantly, developers have deep faith in the Singapore government’s crisis management capabilities. With diverse supply chains and money available to support businesses and individuals, the country has weathered previous crises effectively. The government’s efforts to create good jobs for locals and equip workers with relevant skills also give developers assurance of a large pool of high-earning potential condo buyers.

Analysts widely agree that new condo launch prices are likely to continue rising, supported by higher land costs, rising construction expenses, and strong take-up rates at recent projects. With land and building costs both climbing, developers will need to pass on a portion of these increases to maintain margins.

Mogul.sg’s chief researcher Mai Jun Rong has observed that strong new launch sales have given developers enormous confidence, with some sites attracting bids that appear remarkably high. However, rather than large one-off price hikes, developers may pursue a more balanced approach — pricing competitively at launch and adjusting upward progressively as units are absorbed.

SRI Research’s Mohan Sandrasegeran has cautioned that while the overall land market outlook is not entirely clear, the government’s continued release of land supply helps ease competitive pressure on individual sites, which in turn supports more rational bidding and stabilises land price trends.

Construction costs, financing environment, and household affordability remain important factors influencing land valuations. Weak demand combined with cost overruns and construction delays might lead to severe losses for housing development projects. However, with household income growth, new immigration policies attracting talent, and generally supportive financing conditions, most analysts expect new launch prices to edge steadily upward.

The energy crisis stemming from the Middle East conflict does pose real risks to the property market. High energy prices could dent economic growth, cause widespread job losses, and push interest rates higher — all of which would weigh on housing demand.

OrangeTee & Tie’s vice president has noted that while developers will be closely watching building material and logistics cost changes, the current geopolitical tensions could directly affect new launch sales timelines. Recent sales data, however, still reflects stable demand driven by genuine upgrading needs and healthy household balance sheets.

CBRE’s Song has suggested that in the absence of a sharp economic shock or major interest rate spike, attractive new launches backed by strong household balance sheets will continue to support market sales. Analysts also note that Singapore’s property demand is resilient because of the deep-rooted aspiration among Singaporeans — including younger generations — to own their homes and climb the property ladder from HDB to private housing.