When the forces of supply and demand come up to the fore and the latter is strong compared to the former, then the buyers are made to suffer. One will not agree less with the position of this second largest developer because land, the major commodity here is scarce in Singapore.
The comment of this leading developer is due to the sour experience they had when it was made to pay a hefty sum of money for a parcel of land measuring 170,000 square feet. This parcel of land is situated by the shopping belt off orchard road.
For residential property however, the prices in this sector have been stable over the years since the year 2009 when the government introduced measures to keep low the enthusiasm of buyers. But that cannot be said of land for development purposes; to date Singapore remains the most expensive market for housing in Asia. Property prices on Sophia hills, Gramercy Park, The Asana, and Liv on Wilkie are a bit higher when compared to those for new launch condo units in other areas.
One man’s food the saying goes is another man’s poison. The powers that be in city development are happy because having bought this property at a very low price, it is time for them to reap the dividends on their investments.
This new launch condo which was bought just ten years ago for a asking price ofS$383 million. Following closely after Hong Kong, Singapore is the next most expensive place if you want to get a luxury home according to the wealth report for 2016 compiled by Knight Frank LLP an estate agent.
When prices are exorbitant and out of reach; sales will plummet; profit will nose dive. For the year ended march 31st, a 14% decline in profit was recorded. Equally, revenue slid by 11%.
The government holds the ace here; but even at that the government is reluctant to take the necessary measures that will inject life into the property market. The fear in government circles is an envisaged ripple effect that these measures are likely to bring on the property market.
The finance minister in his budget speech last March 24th was insistent that government will maintain its position even in the face of this exorbitant prices; this was the position of the National development minister earlier expressed in February.
Expectedly, there is a lull in activity in this sector of the property market. Even foreign buyers are no longer forthcoming; it is that bad, it seems this price regime on prime land in Singapore has gone out of even the reach of the foreign buyers. This situation has led to increase in stamp duties on home purchases which will ultimately affect for condo for sale prices.
The situation as it regards purchase of prime land calls for sober reflections on the part of all- the government included.