The aggressive bidding for land at public tenders this year saw developers paying an average of 29 percent more for residential sites over comparable plots sold over the last five years, reported The Straits Times.
Cushman & Wakefield noted that the figure is significantly higher compared to the 13 percent average premium that developers paid in the second half of 2016.
“This is testament to greater confidence (on the part of) developers in the residential market, bolstered by the positive response in new project launches in recent months,” it said, noting that the hike in sales was partly attributed to the lifting of some of the cooling measures in March.
The number of bidders at tenders has also increased to 13.3 in the first four months of 2017 from 8.25 in 2H 2015.
In fact, interest from foreign players has intensified, with two of four land tenders awarded to foreign companies so far this year, noted Cushman & Wakefield.
With this, analysts expect upcoming tenders for this year to be keenly contested as land-starved developers fight over a limited supply of land.
However, International Property Advisor chief executive Ku Swee Yong does not expect the government to “put more sites out in its upcoming land sales programme in view of the large number of vacant units and the weak leasing market”.
Notably, the Ministry of National Development is set to announce which sites will be available for the second half of 2017 next month.
And given the “strong liquidity-driven market”, foreign developers are expected to outbid their local counterparts, possibly resulting to more private land acquisitions, said Cushman & Wakefield.
This article was edited by Denise Djong.
