FOREIGN DEVELOPER PARTICIPATION IN SINGAPORE'S GOVERNMENT LAND SALES: BIDDING BEHAVIOUR AND IMPACT ON LAND VALUE

Abstract

This study is a timely investigation into the growing participation of foreign developers in Singapore’s GLS. The increasing rate of foreign developer participation has led to growing sentiments that the real estate market in Singapore is more competitive than ever. Industry experts and the media have debated on the possible effects of the rising number of land bids and new benchmark land prices bided by foreign developers. In this research, the bidding behavior of foreign developers and its impact on land value is assessed. Using data from historical bidding information released by the URA and HDB, two hypotheses were run. On the first hypotheses, key results show that, after controlling for traditional expected variables such as location and space attributes; foreign developer participation is positively associated with land price but is not statistically significant. The results, however, also reveal that foreign developer participation via individual bids or JV with local developers is more competitive, and submits higher optimal bids as compared to JV by only local developers. In the second hypotheses, when foreign developer participation is segmented, the regression findings reveal that bid prices are significantly influenced by the respective nationalities of foreign developers. Hong Kong developers hold the most significant relationship, while Chinese and Japanese developers also hold relatively significant relationships to land prices. From the results, it is evident that urban land valuation in Singapore is also influenced by other factors, aside from the traditional location and space attributes. The results from this study affirm the hypothesis that the differences in bidding iii behavior of foreign developers of different nationalities can have varying significant impact on urban land valuation in Singapore.