The property investment sales market has grown 89% in the first quarter alone this year, reaching $11 billion in total investment sales.
Collective sales and upward trends in other residential market segments have accounted for much of this increase and the year-on-year increment could be as much as 15%.
$46 billion in property investment sales expected this year
In the residential segment alone, there has been a 233% year-on-year increase to $9.1 billion. The record for the highest amount of investment sales for a quarter was $9.5 billion in Q2 of 2007. The 5 largest transactions in Q1 were all from the residential collective sale segment:
- Pacific Mansion – $980 million
- Park West – $840.9 million
- Pearl Bank Apartments – $728 million
- Goodluck Garden – $610 million
- Brookvale Park – $530 million
The collective sale fever truly heated up in mid-2017, with developers aggressively bidding for land sites to replenish their land banks. But as more of these land banks are filled up and developers have less to spend, their selection criteria have skewed somewhat to suburban plots with lower and more affordable premiums.
This lowers their risk in the case of a future supply glut and a lower quantum price is also easier to manage.
Premiums for en bloc deals have diminished
While developers are more selective with their bids, this may not necessarily signify a cooling collective sale market. Land sites with realistic asking prices and good locations will still command attention.
Besides the private market, the public residential segment also recorded $1.24 billion in investment sales under the Government Land Sales Programme (GLS). These include sites at Sumang Walk in Punggol and at Handy Road in Dhoby Ghaut.
Developers are expecting overall property investment momentum to pick up over the rest of 2018. Singapore’s political and economic stability are some of the market’s most valuable assets.