Stingy developers slash land bids as property market turns sour

Developers turning extra cautious.

According to Savills, developers have in general become more cautious as the market shows signs of slowing andthis 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. Savills believes that developers will continue to replenish their land banks in the future, but will become more selective and moderate in their bids.

Here's more:

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