DE­VEL­OP­ERS HUN­GRY FOR LAND

Property firms more ag­gres­sive in bid­ding at auc­tions as S’pore new house sales surge

New Straits Times - - Business World -

DE­VEL­OP­ERS’ hunger for Sin­ga­pore land is adding to signs that the city’s hous­ing mar­ket is mak­ing a come­back af­ter three years of price de­clines.

As new house sales surge af­ter an eas­ing of property re­stric­tions in mid-March, de­vel­op­ers are be­com­ing more ag­gres­sive in bid­ding at land auc­tions.

On av­er­age, they’ve paid a 29 per cent pre­mium, the high­est level in at least five years, ac­cord­ing to bro­ker Cush­man & Wake­field Inc, which makes com­par­isons with the past prices of sim­i­lar prop­er­ties.

“Sen­ti­ment has changed,” said Christo­pher Tang, chief ex­ec­u­tive of­fi­cer at de­vel­oper Frasers Cen­tre­point Ltd. “The gen­eral sense is that the mar­ket has bot­tomed out and like many of the de­vel­op­ers in Sin­ga­pore we are a bit land­bank-starved — we are keen to build our land­bank.”

A land auction last month at­tracted a record 24 bid­ders, amid de­mand from Chi­nese and Malaysian de­vel­op­ers.

House buy­ers are snap­ping up units at de­vel­op­ments like the Sea­side Res­i­dences con­do­minium, east of the city. New home sales more than dou­bled last month from a year ear­lier, a re­port on Monday showed, af­ter a surge in March to the high­est level in nearly four years.

While the signs are pos­i­tive, the scale of any come­back may be limited by govern­ment ef­forts to avoid any re­newed over­heat­ing of a mar­ket that peaked in 2013.

While the govern­ment tweaked its cool­ing mea­sures in March, boost­ing buyer sen­ti­ment, it left most of the re­stric­tions in place.

The city’s ef­forts con­trast with Hong Kong’s fail­ure to tame a mar­ket where house prices keep hitting records.

Sin­ga­pore’s house prices fell three per cent last year and have dropped for 14 straight quar­ters, the long­est slide since the data were first pub­lished in 1975. The city’s next quar­terly prop­er­typrice num­bers are due June 15.

“There has been a con­sid­er­able lift in mar­ket sen­ti­ment,” said Des­mond Sim, head of re­search for Sin­ga­pore and South­east Asia for CBRE Group Inc.

He also cited “pent-up de­mand” from buy­ers as de­vel­op­ers re­frained from launch­ing projects in the fi­nal few months of last year.

De­vel­op­ers have since plowed back into the mar­ket, of­fer­ing a to­tal of 1,616 units in March, the most since May 2014, ac­cord­ing to Cush­man & Wake­field.

Among de­vel­op­ers, the num­ber of bid­ders per land ten­der in­creased to 13.3 in the first four months of this year from 8.3 in the sec­ond half of 2005, ac­cord­ing to Cush­man & Wake­field.

Win­ning bid­ders at re­cent land sales in­cluded China Con­struc­tion (South Pa­cific) De­vel­op­ment Co. and Malaysia’s SP Se­tia In­ter­na­tional Pte Ltd. Bloomberg

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