Singapore developers remain bullish on the residential property market considering their strong interest for Government Land Sales (GLS) sites in 1H2013. Over the last two years, the number and value of bids launched for such sites have been rising, according to a Knight Frank report.
“The proportion of GLS residential sites with more than six bidders has been increasing since 1H2011. Between 1H2011 to 1H2012, the proportion of available sites with six bidders or more ranged between 61 percent and 75 percent. However for the past year, the proportion of GLS residential sites with six bidders or more increased to 88 percent and 90 percent in 2H2012 and 1H2013 respectively.”
Of the 10 GLS housing sites sold in 1H2013, a private non-landed plot at Faber Walk received the highest number with 18 bidders and was awarded for S$156.7 million.
“Annihilating specific attributes of individual sites, the general increase in the number of bidders in public investment sales in recent years is a result of continuing optimism in the residential sector in the last few quarters. In addition, the emergence of more niche developers, contractor-turned-developers and joint ventures have increased competition for GLS sites, in particular for smaller land plots with lower capital investment and sites with good location,” the report noted.
Meanwhile, private residential investment sales saw a decline with just 11 deals or S$1.2 billion achieved in the first half, one of the lower totals since 2010.
“The collective sale market for the private residential sector saw low transaction volume for the past year, chiefly owing to the muted high-end residential segment amid property cooling measures. Developers face challenges to offload their high-end residential properties due to its higher selling price, imposition of Additional Buyer’s Stamp Duty and a much-reduced pool of foreign buyers in this segment,” added Knight Frank.