Total land sales revenue drops 41% to S$7.3b in FY2008-2009

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Total land sales revenue drops 41% to S$7.3b in FY2008-2009

Post  fairyjade on 8/10/2009, 19:03

By Yasmine Yahya/ Wong Siew Ying, Channel NewsAsia | Posted: 08 October 2009 1446 hrs



Total land sales revenue drops 41% to S$7.3b in FY2008-2009

SINGAPORE: Revenue from government land sales fell 41 per cent to S$7.3 billion in the last fiscal year ended March 2009.

But analysts said despite the decline for the full year, land prices have actually risen 30 per cent in the past six months and there are some concerns that this could lead to another property bubble.

Showflats have been packing in the crowds for many months now. Demand for land has also picked up, with more plots released for tender since April this year.

Analysts expect demand for land to grow in 2010 on the back of more positive market sentiment and developers looking to beef up their land bank.

In the first quarter next year, observers said the government could release more strategic sites at Jurong Lake District, Kallang Waterfront and Rochor/Ophir Road.

And when the government brings back the Confirmed List of sites in the first half of next year, more land will be on the market.

According to market watchers, the net effect is that revenues from such sales are likely to stay around S$7 billion in the current fiscal year to March 2010, similar to last year. Observers said increasing land prices will also boost revenues.

Recently, a residential site at Serangoon Avenue 3 was sold for S$221 million.

Donald Han, managing director, Cushman & Wakefield, said: "I was a bit surprised at the bidding for Serangoon. I think the top bid was 10 to 11 per cent higher than the second bidder.

"One would expect more cautious bidding in view of the current market and stock market conditions have started to come down. But I think by and large, it is a vouch of confidence in the Singapore residential market."

Some analysts said more measures may be needed to rein in the property market.

Colin Tan, director, Head of Research & Consultancy, Chesterton Suntec International, said: "I think the set of measures they announced recently were to curb speculation but this excess liquidity is not speculation. It is investment, so this is lots of money trying to find a more productive use. So maybe a different set of measures may need to combat this excess liquidity."

Observers said the situation should also be closely watched to ensure excess supply does not build up. - CNA/vm
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