Aggressive bids for govt land sites expected in first half-year
EXPECT aggressive bidding for government land to be released in the first half of next year, pushing up prices of future launches.
The supply is tighter, enough to yield only about 11,600 homes, the first time the number has dipped below 14,000 since the second half of 2010.
But analysts also point to the high quality of the sites, demand from foreign players and contests for adjoining sites.
Industry players said the cut in supply was prompted by fears that an oversupply of private housing is building up.
SLP International executive director Nicholas Mak said six of the eight confirmed sites will be keenly sought by developers.
The mixed-use site in Upper Serangoon Road, which is near the MRT station, and the Prince Charles Crescent site in the vibrant Redhill area, will be hotly contested, Mr Mak said.
The other four sites - two adjacent sites in Yishun Street 51 and another two adjoining sites in Fernvale Road - will also see aggressive bidders trying to secure both parcels together in each area. Each batch will have a separate tender closing date.
"If you win one and your competitor wins the other, and the two of you launch at around the same time, you will be eyeing each other," said Mr Mak.
Savills Singapore's head of research and consultancy, Mr Alan Cheong, said what has been seen this year is quite aggressive bidding from foreign developers or companies which have strong funding from overseas. This is expected to prop up the bid amounts put in, he said.
This phenomenon of high foreign demand is likely to persist, said Ms Christine Li, head of research at OrangeTee.
"In the past few tenders, the difference between the first and second bids has been more than 10 per cent," Ms Li noted.
While current market conditions may make some developers cautious, foreign developers may continue to bid aggressively, she said.