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A reserve price that sets a minimum level for sales of government land is necessary to ensure that tracts are sold at fair market rates, the National Development Ministry said in a statement, according to Bloomberg.
“The reserve price has not deterred the successful sale of sites under the Government Land Sales program,” the Ministry said today. “It is the government’s duty as the custodian of state land to ensure it obtains a fair market price for a site.”
The Ministry was responding to comments from Simon Cheong, the president of the Real Estate Developers’ Association of Singapore, reported in the local press, that the government should allow the city-state’s property market to operate freely.
Market forces aren’t completely free to operate because the government, which owns more than two-thirds of all land in Singapore, controls the supply and doesn’t sell land unless bids meet its reserve price, the press reports cited Cheong as saying.
