NUS Business School study: Increased golfing activities by developers lower bids for land parcels

Singapore, 15 January 2020 – A study by the National University of Singapore (NUS) Business School has found that the sale prices of new residential units are about eight per cent lower when senior executives of real estate development firms have informal exchanges while golfing.

According to the study, golf patterns of corporate top executives change significantly following the semi-annual releases of the government’s land sale schedules in Singapore. After land sale announcements, developers increase the frequency of golf games with other developers by 14 per cent in the first week and 24 per cent in the second week relative to the week before such announcements.

Informed bidders acquire land parcels at 14.4 per cent lower compared to other less informed or uninformed winning bidders. The lower bid prices were converted into losses in land sale revenue of more than S$147 million per year between November 2010 to May 2014, which correspond to about 0.2 per cent of the government revenues and about one per cent of the total land sale proceeds, on average. The lower land prices allow the developers to sell new units about eight per cent cheaper.

The study was co-authored by Professor Sumit Agarwal, Low Tuck Kwong Distinguished Professor in Finance, and Professor Sing Tien Foo, Head of Department of Real Estate and Director of Institute of Real Estate and Urban Studies (IREUS); together with Assistant Professor Qin Yu and PhD student Zhang Xiaoyu of the Department of Real Estate at the NUS School of Design and Environment.


Evaluating how informal interactions via golf games affect information exchanges, four datasets were used for the data matching process:

  1. Company senior executives in registered developer companies in Singapore;
  2. Golf game records of golf players in Singapore from 2010 to 2014;
  3. Singapore’s government land bidding results from 1990 – 2016 from Urban Redevelopment Authority and Housing and Development Board; and
  4. Transaction records of all private residential properties from 1995 to 2018.

A comprehensive matching process is used to connect the corresponding sample datasets from November 2010 to May 2014; and the final samples include:

  1. 774 senior executives of land bidding firms who golf;
  2. 103 land bids by 895 bidders; and
  3. Seven rounds of land auction announcements


The study found that such land transactions by informed bidders generate short-term negative spill-overs to other properties in the vicinity. The prices of neighbouring projects are about 9.9 per cent lower within 30 days after the land auction results are publicised, and the effect lasted for no more than 90 days.

Prof Agarwal said, “The ripple effect is seen when these lower land transaction prices send a negative signal indicating a downward market trend for property prices. Senior executives such as directors and CEOs gather information through informal social networks to improve their companies’ performance. While information sharing is not prohibited by law, governments whose fiscal revenue relies on a large proportion of land sale revenues must be prudent of developers’ behaviour on the golf course to ensure a competitive land auction market.”