Chart of the Day: Government lands pushed home investment sales up an amazing 167.8%

Didn't the latest measures scare developers?

According to Savills, investment sales in the residential segment totalled S$2.31 billion in Q1/2014, representing 58.6% of the total transaction value.

Compared with the preceding quarter, it increased by 167.8%. The growth was mainly attributed to more government land parcels being sold in the reviewed quarter. Private sector investment sales also grew by 7.5% QoQ.

Here's more from Savills:

Despite the latest measures announced in December last year that made it more difficult for people to buy executive condominium (EC) units, developers continued to exude confidence in this market segment, as witnessed at the five tenders of EC sites in the reviewed quarter.

For example, the tenders of EC sites at Westwood Avenue and Anchorvale Crescent attracted 12 bids each. Nevertheless, developers have in general become more cautious as the market shows signs of slowing and this is reflected in the moderation of bid prices in the recent GLS tenders.

The gaps between the top two bids have also narrowed significantly this quarter to 2.7% for private housing sites, compared with 14.4% in Q4 last year, 3.8% in Q3/2013 and 6.3% in Q2/2013. For EC sites, the average winning margin narrowed to 1.6% in Q1/2014, from 1.9% in Q3 last year and 6.1% in Q2 last year.

We believe that developers will continue to replenish their land banks in the future, but will become more selective and moderate in their bids. Unless there is a marked pick-up in sales activity in the primary market, the anticipated rise in construction and holding costs will result in further moderation of GLS bid prices.

According to the REALIS system, a total of 23 residential properties were sold for no less than S$10 million each. Among these, 18 were landed houses, up significantly from the 11 recorded in Q4/2013. Reasonable prices and limited supply helped steady the sales of prime landed residential properties, especially
good class bungalows.

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