LAND BIDDING AND PRICING STRATEGIES OF DEVELOPERS

Abstract

This study first examines whether developers in Singapore are price leaders or price followers when launching their new residential properties. The study is further extended to examine whether the developers’ aggressiveness during the bidding process will have any effect on the subsequent sale prices of the new developments. The empirical results, based on residential projects built on GLS sites in Redhill and Tanah Merah suggest that developers in the two regions are price followers. This would mean that they price their new developments competitively relatively to the pricing of existing developments. The relationship between the aggressiveness of developers’ land bidding and the eventual sale price of the housing units is not conclusive.