Recently, there’s been a pretty confident statement about Government Land Sales (GLS), and how it could lower some of the costs for developers. One suggestion is that, with land prices being more attractive (read: cheaper), it may help to moderate future new launch prices.
But if I’m a buyer, I wouldn’t celebrate just yet. Put it this way: Have you ever seen restaurants lowering prices because the cost of ingredients went down this year?
To be more direct: developers don’t just price their projects based on land costs. That’s one major factor, yes. But another equally significant-or I might say more significant-factor is what the market can bear. For example, if the current market rate is $2,400+ psf and there are still buyers, then that price point will likely stay. It doesn’t matter if the reserve prices for GLS sites fall….
