Residential investment sales soared in 2017
Singapore investment sales surged by 119 percent to $21.7 billion for the whole of 2017.
Residential investment sales in Singapore rose sharply by 184 percent year-on-year to $8.3 billion last quarter and surged by 119 percent to $21.7 billion for the whole of 2017, according to a new report from Colliers International.
These transactions comprise all private houses sold for at least $5 million and residential sites successfully auctioned via the Government Land Sales (GLS) Programme.
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The stellar growth in residential investment sales is attributed to the collective sale frenzy. In fact, investment sales in the private housing market soared 153 percent on an annual basis to $6.8 million in Q4 2017 thanks to the en bloc fever, and this segment accounted for 37 percent of the overall transaction value last year.
“A total of 27 residential collective sales with a combined value of $8.13 billion were transacted, making 2017 the best showing since 2007 when $11.6 billion was transacted,” said the property consultancy.
“In addition to the 12 sites worth $3.6 billion that were sold in preceding quarters, 15 residential collective sale sites worth $4.5 billion were transacted in Q4. Most of the successful bid prices were done at premiums, some (slightly above) 30 percent the asking prices.”
For instance, Crystal Tower was sold at a 30.9 percent premium from its asking price of $138 million, while Royalville changed hands at a 29.9 percent premium from its asking price of $368 million.
The spike in residential investment sales here was also driven by the GLS Programme, which made up 22 percent of total transactions by value. This was followed by strata properties (13 percent), landed housing (12 percent), stake holding (seven percent), good class bungalows (four percent) and development sites (four percent).
Looking ahead, Colliers International expects Singapore’s collective sales market to remain vibrant this year as more owners of strata-titled commercial and mixed-use projects jump on the en bloc bandwagon.
“We estimate over 13,000 units could be redeveloped on the 27 collective sale sites sold in 2017, and these could be completed between 2021 and 2023. Developers may become more selective, but we envisage reasonably priced sites with strong locational attributes would still appeal to developers,” it added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg