Land Cost Rapid Appreciation

The rise and rise in land cost

Can we keep pace with Singapore's rapid and ever increasing land cost of late?

The plot of land for ECO  in Bedok was $534 psf. in 14 Feb 2012

6 months later, in Aug 2012, the Urban Vista land cost jumped to $676 -  27%  over that of ECO

In Oct 2012, 2 months after the Urban Vista bid, The Glades site was sold for $791, up another whopping 17% over the Urban Vista site

From Feb to Oct 2012 - land value appreciated a feverish 48% - from $534 psf to $791 psf in Bedok / Tanah Merah Region.

Selling land is good business in recent times. Since these land sites belong to the state, the next best thing to push up business profits is of course property. Small wonder developers are all over the place, aggressively competing for a piece of the action. Streams of financial glory, visions of gold and dreams of make it rich, rapidly converge into what is now known as 'property frenzy'. It is almost unstoppable. A spade of cooling measures begin to take shape to forestall what in economic terms is called a 'property bubble'.

So here are the participants in this global phenomena of the wealth cycle.

Up stream, the state,  Mid stream, the developers and down stream the buyers.

In an up cycle, everyone wins. Every one deserves a pat on the back. And all winners are on cloud nine. No talk of defeat, no thoughts of failure. All these are taboo. And God forbid I should talk about it.


Some questions to think over.

1. Can our earnings match the pace of rapid inflation?

2. Why are developers aggressively bidding up all over these sites?

3. Are property prices destined to fall if space which is so limited in Singapore cannot keep up with the soaring population?

4. Value is equated to scarcity. Will premium spaces fetch premium prices?

5. Does the infrastructure of a place contribute to the value of a property?

6. Does MRT, schools and amenities. enhance the appeal of a location?

7.  If a place is unattractive, inaccessible or remote, what are the chances that investors will engage?