Strong Competition for Land

According to BNP Paribas, “Developers are likely to be dealing more carefully at the moment, as they take into account the challenge of offloading their units into their bidding prices. However, the demand for land has not decreased.”

It might be unexpected but tender ventures are now seeing an increased amount of bids per site as local developers try to restock their land reserves, overseas developers attempt to invest in Singapore, and construction magnates dedicate themselves to opening up a tricky market.

Like-for-like comparisons on West Coast EL Development Parc Riviera plots exchanged recently, in contrast with earlier regions, reveal that bidding prices have dipped significantly. However, demand is still robust, with an average of nine bids per site in the months between January and September last year.

West Coast Vale Condo

This could be down to the fact that developers are desperate to replenish, in the wake of recent land demand restrictions from the Government Land Sales scheme. This was suggested by BNP Paribas specialist, Chong Kang Ho, who used statistics from 185 winning GLS ventures to make his conclusions for EL Development Tender Launch.

By examining the margin buffers, Ho discovered that developer bidding actions have grown more measured and that margin buffers have tended to remain firmly beyond the mean of 12.1%. However, they are yet definitely positive, as the margin buffers are under the one standard deviation of 17.1%.

The margin buffer of a West Coast Vale Condo successful bid describes the disparity between the predicted price of launches being carried out close to the land tender location and the development estimate for that space.

EL Development West Coast Vale Condo

EL Development West Coast Condo

The bigger the West Coast EL Development Condo buffer, the more careful the developer will be in their attempts to safegaurd themselves and their investment against the danger of dropping property prices. Alternatively, the more meagre the margin buffer, the more ambitious the developer will usually be when it comes to securing the bid for West Coast Condo.

During the second term of 2008, for instance, the typical margin buffer grew to a high of 25%. This was a representation of the elevated care with which West Coast EL Development Condo developers were preparing themselves for dropping property prices, as the whole planet looked set to suffer from the 2008 economic crash.

The Chong investigation also chartered the gap premium between successful bid figures in comparison with their median bid figures and discovered that they were expanding again in 2015 for West Coast Vale Condo. This is good evidence to suggest that developers hold varying opinions on the future of the property market, particularly when it comes to growing anxieties about the world economy.

According to Chong, a West Coast Vale EL Development West Coast Vale EL Development broading gap of this kind tends to indicate turbulence ahead – either a global downturn or the period following the implementation of new regulations.

“It could be because developers perceive the influence of new regulations in different ways and this results in larger disparities in bid figures for some time.”

West Coast Vale Condo

West Coast Vale EL Development

It is clear to see that times are hard for developers. Also, according to Chong, the reduced drop in land prices, in contrast with the gradually dipping property prices (which fell an additional 1.3% during the third term of 2015), could actually harm the margins of developers in Singapore. This could be the result if selling prices continue to drop within the key sales market.

In accordance with our evaluation, the total margins for new ventures dropped to 11.8% in 2014. This is a dip from 12.6% in 2013 and from 22-25% in 2010-2012. (Refer to the table).

According to Chong, the robust demand for land continues. However, elevated involvement from non-conventional EL Development West Coast Vale Condo developers is making it tough for standard developers in Singapore to replenish their reduced land reserves for West Coast Vale EL Development Condo.

From his perspective, non-conventional west coast West Coast Vale Condo developers means developers from overseas, boutique land buyers, and construction based enterprises, all of whom are keen to increase their market share, in order to take advantage of multiple economies of scale.

As of this year, standard developers like City Developments, UOL, Rasers Centrepoint, CapitaLand, Keppel Land, and Far East Organisation have not had any successful bids. Though some may have participated, they were outsed by new entrants.

There were, on average, 1.8 overseas investors bidding for each site this year. This is quite an increased on the 1.4 bidding in 2012.

At the moment, more and more developers are founding consortiums to make their bids for them. This is likely to be an attempt to spread out the level of danger within EL Development Parc Riviera hazardous market.

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