Freehold condominium Amber Park fetched $906.7 million yesterday in a collective sale, the latest of several big-money transactions, but industry bigwigs are at odds over whether the residential market is heading for a major rebound.
The record sale for a freehold site, clinched by City Developments Limited, comes on the heels of a string of large collective sale deals, including Tampines Court at $970 million.
On Monday, GuocoLand secured a commercial site with the old Beach Road Police Station at $1.622 billion, setting a record unit price.
And there could be more on the way, with the tender for Normanton Park closing today after owners launched a second collective sale bid in August with an $800 million reserve price.
But Real Estate Developers' Association of Singapore (Redas) president Augustine Tan said yesterday that land acquisitions at these higher prices are "not sustainable".
Developers are replenishing land banks in a risky fashion, he noted, because slower economic and population growth means that "we do not see a runaway demand in sales transaction volume and property prices in the next few years".
Mr Tan, executive director of Far East Organization, said at the association's Mid-Autumn Festival lunch that buyers remain price-sensitive in the light of the tepid economic climate and slow jobs market.
With interest rates on the rise, "many, including displaced sellers from en bloc sales, may downgrade to public housing", he said.
Demand for new private homes may well soften in that case, despite positive market sentiment and bullish land acquisitions lately.
There were 15,000 unsold private homes in the pipeline in the middle of this year, Mr Tan noted. Various collective sales and government land sales could yield almost 24,000 new units by the year end. He said: "If the prevailing bullish appetite for residential land persists and demand is not sustained, it will hasten the compounding effects of increasing supply and high vacancy."
But others in the industry felt the market would still bite as higher land bids send break-even prices climbing, as third-quarter flash estimates showed private home prices reversed 15 quarters of decline to rise by 0.5 per cent.
Oxley Holdings deputy chief executive Low See Ching told a briefing on Tuesday that fears of a bubble may be overplayed, even as property consultancy CBRE's Mr Desmond Sim warned against reading too much into one quarter's result.
Roxy-Pacific Holdings chief executive Teo Hong Lim, whose company inked a $33.5 million deal on Monday for residential sites in Guillemard Lane, told The Straits Times: "I think the market should be stable, and the good thing is that buying interest has improved."
He added: "The Government a few years ago took measures to contain the debt level for Singapore buyers, and I think a lot of liquidity has been locked away. Singapore buyers are not overstretched."
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