Total residential investment sales surged to $2.52 billion in the first quarter of 2014 from just $1.16 billion in the quarter before due to the sale of seven housing sites by the government, revealed a Colliers International report.
Compared to the $460.43 million in Q4 2013 from the sale of two residential plots, the aforementioned seven sites were sold for a total of $1.88 billion. Of these, a two hectare condo parcel along Upper Paya Lebar Road attracted the highest bid of $392.3 million, which translates to $648 psf ppr.
As a result, the lion’s share of residential investment sales in the first three months this year came from the seven deals under the Government Land Sales (GLS) Programme.
On the other hand, the private sector only accounted for $639.99 million, a drop of 8.3 percent over Q4 2013. “This stemmed from the continued sluggishness in the residential collective sales market, as well as strata-titled unit sales on an en bloc basis,” the consultancy said.
Nevertheless, the surge is sales of GLS housing sites in Q1 pushed the residential sector to top spot in terms of overall investment volume. At $2.52 billion, investment sales in this segment surpassed the commercial, hospitality and industrial sectors which reported $1.8 billion, $504.8 million and $465.77 million respectively.
Moving forward, residential investment sales for the rest of the year are expected to be bolstered by public land sales. Although such sites are still in-demand, developers may moderate their bids or become more selective, given the current state of the housing market.
GLS residential sites that are expected to attract good response from developers include a residential site along Margaret Drive and two EC sites at Yishun Street 51, according to Knight Frank.
“However, on the private land sales front, the residential collective sales market in particular, looks likely to remain muted in the coming quarters. This is on the back of softer demand resulting from the combined effects of the cooling measures,” added Colliers.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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