Apr 7, 2011

The Singapore land sales market achieved four record prices, which revealed the unwavering optimism of developers, despite the global uncertainties.

A recent of Colliers International study showed that property developers display upbeat sentiment and optimism in the country’s property investment sales market, which gained a healthy total of S$9.77 billion in the first quarter of 2011. This was achieved amidst the government’s property cooling measures, the political instability in North Africa and the Middle East and the massive Japan disasters.

Although the quarter’s sales value of S$9.77 billion is 20.3 percent moderation from the S$12.26 billion achieved in the final quarter of 2010, it is still 67.9 percent stronger than the sales completed in the first quarter of 2010, when the Singapore investment sales market was only beginning to recover.

“The fact that the figure for 1Q 2011 was still 67.9 percent stronger than that for 1Q 2010 indicates that market fundamentals remain largely positive despite all the uncertainties,” said Ms. Chia Siew Chuin, Director of Research & Advisory at Colliers International.

“In fact, we have observed developers' confidence in the investment sales market when they set four record prices in the government land sales market — despite the introduction of further property cooling measures during the quarter.”

The first record price was set for the non-landed residential site situated at Bishan Street 14. A consortium led by CapitaLand Limited beat 18 other bidders for a 1.2 ha housing plot with its bid of S$550.1 million. This works out to S$869 per sq ft (psf) per plot ratio, which exceeds the previous record of S$639 psf per plot ratio for the Ascentia Sky site in the Alexandra Road / Tiong Bahru Road locality in December 2007.

The top offer of S$170.1 million (S$320.86 psf per plot ratio), submitted for a site in Choa Chu Kang intended for an Executive Condominium (EC) project by City Developments Limited, also surpassed the previous record of S$320.58 psf per plot ratio attained for the Austville EC site at Sengkang East Avenue / Buangkok Drive in May 2010.

“At the same time, the private sector land sales market also reflected the same upbeat sentiments, where sales picked up momentum in 1Q 2011 and some S$992.58 million worth of private development sites were sold. This is a significant 94.7 percent improvement from 4Q 2010,” added Ms. Chia.

“In particular, the collective sale of seven existing projects for re-development chalked up a total value of S$588.88 million in 1Q 2011, up from the S$427.2 million contributed by 11 transactions in 4Q 2010. The conclusion of the higher-value albeit fewer collective deals in 1Q 2011 is an encouraging sign of developers’ growing appetite for collective sale sites.”

“Looking ahead, looming uncertainties stemming from the political unrest in the Middle East and North African regions, and the possible impact of the disaster in Japan on global economies could potentially temper market sentiments.”

Info courtesy - Propertyguru