BIDDING BEHAVIOUR OF RESIDENTIAL DEVELOPERS UNDER THE RESERVE LIST SYSTEM

Abstract

The Reserve List System was introduced in 2001 as an extension to the existing Government Land Sales Programme. At the same time, the Confirmed List System was suspended for a period of five years as a result of uncertain market conditions. Since then, the Reserve List System has played an important role in injecting flexibility and efficiency in the land sales programme by allowing developers to trigger additional tenders in the period they deem as appropriate. This dissertation aims to capture the prevalent trends in the reserved residential tender market, while comparing the findings to that of the traditional confirmed residential tender market. It also analyses the bidding behaviour of notable develops in the reserved residential tender market. Results from the regression models show that the number of bidders and the level of the Singapore Residential Price Index are positively correlated to the variability of the bids in a reserved tender. This is possibly a result of developers’ attachment of higher private values to ward off keen competition in an economic upturn. In addition, various measures such as winning margin, range of bids, and coefficient of variation were calculated for both reserved and confirmed residential tenders. The average of these measures each indicates that there is generally less variability in reserved tenders as compared to the confirmed tenders.