The lack of land plots available in the market or released by the government under the Government Land Sales programme has seen developers willing to bid an average of 29% more than what has been the usual winning bid in the past 5 years.
It may not be surprising as the market has just begun to turnaround this year and buyers’ confidence have boosted developers’ confidence. A healthy appetite for new and resale private homes, including executive condominiums (ECs) combined with the lack of new land plots made available under the GLS programme has pushed bids for land tenders up. Developers are bidding at prices about 13 per cent higher than the average premium paid in H2 of 2016. Not only are the bidding prices increasing, so are the number of bidders per land tender. An average of 13.3 bids were placed for a single land plot in the first 4 months of the year.
New home launches have received warm and welcomed responses from the buying public in recent months. Projects such as The Clement Canopy and Grandeur Park Residences have experienced brisk sales at their launches and a total of 4,696 new homes were sold in the first 4 months of this year alone, more than double than 2016 in a year-on-year comparison.
Property analysts are however expecting more successful bids from foreign entities which could result in more private land acquisitions this year. Local bidders also tend to be more cautious and will not over-bid for a site. With prime plots being limited, they will naturally attract more and higher-priced bids,