Land still considered valuable commodity in Singapore

Land is rare and hard to come by in the small 720 hundred sq m that is Singapore. Thus the spate of successful collective and land sales that dominated last year’s real estate market comes as no surprise.

Developers keen to fill up land banks while they still can

While most developers would already have had most of their fill at the table from last year’s inviting spread of land sales, others may be just jumping on the bandwagon. It’s a close fight between who has the largest land bank in Singapore. Some analysts believe it to be some of the larger developers such as Oxley Holdings or City Developments (CDL).

Foreign developers such as Hong Kong-list Chinese Developer Logan Property Holdings, Kingsford Development, Qingjian Realty and SingHaiyi Group have also been busy stocking up.

Other local developers with strong foreign presences who also have been topping up on residential land plots include MCL Land, Allgreen and Frasers Centrepoint (now Frasers Property Limited).

There are however developers who have yet to acquire any land locally and will be on the lookout for top picks. These include Far East Organization, CapitaLand, Ho Bee Land and Wheelock Properties.

Location and affordable quantum prices are key factors

With 22,000 new units across 40 locations poised to enter the market this year and the next,  developers are acutely aware of narrowing margins as land prices rise. Increasing competition from completed new units aside, they also have a 5-year deadline to adhere to for finishing and selling their units.

The narrowing price gap between units in prime and suburban locations means developers will be more selective. Land plots in prime locations and with affordable quantum prices are likely to secure the most bids.

For the consumer, this means a heady rush of new launches coming at them as early as this year with units at affordable but possibly rising prices.

However, it may be also wise to calculate the long-term risks as interest rates threaten to rise. Economic growth is also still very much a question mark.