As the demand for land increases for developers this year, the price of government sites have increased drastically. Developers are now paying 29% more for plots amid competitive bidding at land auctions and this figure is about 13% higher than the average premium recorded in the second half of 2016.
Cushman and Wakefield, commercial real estate broker, said that this increase in premium is “testament to greater confidence” in the residential real estate market on the part of developers who have been “bolstered by the positive response in new project launches in recent months”.
[Read more on the surge in home sales in 2017 in “Singapore Property Market Prepares for a Comeback as Developers Rev Their Engines”]
MORE INTEREST FROM FOREIGN DEVELOPERS
Public land tenders have also seen more bidders this year with more interest from Malaysian and Chinese developers.
Malaysian developer SP Setia won the highly competitive tender for a private residential site in Toh Tuck Road, successfully securing the plot for $265 million. There was a record-breaking 24 bids for the non-landed residential site.
Another tender in Tampines, eventually clinched by City Developments for $370.1 million, attracted five Chinese developers out of the total nine bidders. Half of land tenders this year have been won by foreign bidders and this is further evidence that “interest from foreign players has [also] intensified”, as mentioned by Cushman & Wakefield.
MND TO ANNOUNCE MORE AVAILABLE SITES UP FOR TENDER
The Ministry of National Development is set to announce the sites that will be made available for tender in the second half of the year as soon as next month.
Read more on this at the Straits Times website – “Aggressive land bids drive premiums up at government sites”