Developers are bidding more aggressively for land amid estimations that they are sitting on a $22.9 billion war chest. (Photo: Nikki De Guzman)
Property consultancy Cushman & Wakefield thinks that land purchases in Singapore by real estate developers could hit $16 billion this year, with more record land deals emerging, reported Bloomberg.
This is because Cushman’s research director Christine Li believes that developers have accumulated plenty of cash since the housing market was previously weak.
Now that the sector is recovering, they are bidding more aggressively for land, she explained, estimating that home builders are sitting on a $22.9 billion war chest from selling homes and as loans from banks.
“Against this backdrop, land deals could continue to set record prices in 2018, especially for sites with little competition in the vicinity,” she said.
Last December, Frasers Property bought a residential site in Jiak Kim Street near the Singapore River for $955.4 million ($1,733 psf), the highest in terms of psf.
Furthermore, if the $16 billion overall tally is achieved for 2018, it will exceed the $12.8 billion worth of residential investment sales involving en bloc and public land deals in 2017 as revealed by Colliers International.
“With the residential market on the cusp of a sustained recovery, developers are likely to continue replenishing their land banks, via public land tenders and private collective sales,” noted Tricia Song, Colliers International’s director and research head for Singapore.