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News: S'pore land price growth is lowest in Asia

Apr 2, 2014

Prime residential development land prices in Singapore fell 1.4 percent over the period of December 2011 to December 2013, according to the Knight Frank Prime Asia Development Land Index, which was launched today.

On the other hand, other Southeast Asian cities experienced surging price growth with Bangkok leading the way over the last two years with 190.7 percent growth.

The Thai capital was followed by Jakarta with a prime land price increase at 184 percent. Kuala Lumpur, Beijing and Phnom Penh rounded off the top five.

The Index tracked 13 residential markets in Asia, and although Singapore saw the lowest price growth regionally, the city-state came in second position for most expensive land prices.

Hong Kong took top spot for most expensive land prices in Asia, while Tokyo is in third place.

 

According to Knight Frank, the land prices in the Index are derived using a repeat residual valuation methodology whereby the consultancy looked at what a reasonable developer would be expected to pay for development land, given the gross development value of the potential scheme, costs (construction, professional, contingencies, and financial), required profit, acquisition costs and relevant taxes.

Nicholas Holt, Head of Research for Asia Pacific at Knight Frank, said: “As the first-ever Index on development land prices of its size and scope, this will become an important resource for developers, investors, financers and policy makers.

“A key observation from our findings points to the fact that in developing Asia we are seeing low liquidity and rapid land price appreciation, whilst in developed Asia such as Hong Kong, Singapore and Tokyo, we see the highest land prices and redevelopment opportunities. In these mature markets, the lack of prime development land has led to more emphasis on redevelopment opportunities, while given the higher cost of land and in some cases high holding taxes, there is often more pressure to develop quickly.”

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg

 

Related Stories:

Private home prices down 1.3% in Q1

Fewer residential land sites sold in 2013

Resale private home prices dipped in Feb

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Shandy Tong
Senior Associate Director
ORANGETEE & TIE PTE LTD
shandytong@yahoo.com.sg
CEA Licence No.:
L3009250K / R006026J
(+65) 8288 8078
(+65) 9029 6282
 


 
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