This sector accounted for almost half of Singapore’s property investments in Q3

The total investment volume in this sector reached S$3.43b during the quarter.

The investment value for residential sites and properties in Singapore amounted to S$3.43 billion in Q3/2023 according to a Savills report, making up almost half (48.1%) of the quarter’s total investment sales. This is also two times more than the S$1.71 billion recorded a quarter ago. 

The report said that the significant quarterly increase was mainly attributable to the award of five GLS sites, which included four private non-landed residential parcels and one executive condominium (EC) site, totalling S$2.94 billion. 

Here’s more from Savills:

On the other hand, investment sales of private residential properties fell dramatically with only 34 luxury homes (each priced S$10 million and above), consisting of 27 landed houses and seven non-landed apartments, sold for a total of S$484.5 million. 

Private housing market activity has begun cooling in recent months. The hefty 60% ABSD for foreigners has sharply curtailed demand from this group of buyers, impacting in particular the high-end market segment. The recent investigation of a high profile money-laundering case may have also dampened market sentiment. For locals and permanent residents, it has been the rising mortgage rates and economic challenges which have affected market activity. 

Consequently, for developers, when it comes to bidding for land, caution prevails. This is evidenced by their prudent response to state tenders of private non-landed residential sites. For example, a land parcel in Jalan Tembusu saw interest from only two tenderers, with the top bid of S$1,069 per sq ft per plot ratio (psf ppr) about 18% lower than the S$1,302 psf ppr paid for a site across the road in January 2022. 

Similarly, just two offers were submitted for a site at Lentor Close, while the winning bid of S$982 psf ppr was 0.3% below the S$985 psf ppr achieved for a site located in the vicinity which was awarded five months ago. Amongst the six GLS sites in Lentor Hills Estate which have been sold since July 2021, this latest bid price was the lowest. 

In contrast, the tender for the EC site at Plantation Close fetched nine bids and was awarded to a joint venture between Hoi Hup Realty and Sunway Developments at S$703 psf ppr, a record high land rate for an EC site. This is the second EC site that has been released in the future Tengah town. The strong interest and record-high price received for this site was not unexpected, as developers’ confidence swelled after watching Copen Grand, the first EC project in Tengah attaining an almost fully sold status a month after its launch last October at an average transacted price of S$1,336 psf.