More land for private housing to be released in second half of the year

SINGAPORE — Amid signs of a recovery in the property market, the Government announced on Thursday (June 29) an increase in the supply of development land for private housing in the Government Land Sales (GLS) programme in the second half of the year. 

Developers will have access to build up to 8,125 units under the latest GLS scheme, a rise from the 7,465 units available in the first half of the year.

“As the demand for new private housing from home buyers continued to rise in the first half of 2017, the number of unsold private housing units in the pipeline has declined. Hence, there is a need to inject a larger supply of residential sites through the GLS Programme to ensure that there is an adequate pipeline supply of new private housing units to meet the needs of our population,” the Ministry of National Development said in a statement.

Analysts described the Government move as a “measured” and “conservative” approach. Recent bids for residential and mixed-used sites on the GLS scheme have been aggressive, and there is general recognition of the need to step up land supply to meet the increased demand for land from developers, say property experts.

The confirmed list comprises four private residential sites — including one Executive Condominium (EC) site — and two commercial and residential sites that can yield 2,840 private residential units and 26,800sqm gross floor area (GFA) of commercial space. The reserve list comprises nine private residential sites and one commercial site. These sites can yield 5,285 private residential units and 56,790sqm GFA of commercial space, mostly for office use. 

The residential sites in the confirmed list are in Chong Kuo Road, Handy Road, Sumang Walk and Hillview Rise, while the two mixed-use sites are in Holland Road and Sengkang Central.

The relatively “modest” increase of 22 per cent in the total number of housing units, including ECs, on the confirmed list from the first half of the year reflects a “mixed view” on the turnaround of the residential segment and the strength of that recovery, said Ms Christine Li, research director of Cushman & Wake Singapore. 

“The Government’s conservative approach also points to a need to avoid knee-jerk reaction to a selected group of bullish developers, who are often foreign developers expanding their footprints in Singapore,” she noted in a statement.

The supply of 2,840 units from the confirmed list is higher than the 2,330 units from the first half of the year, whereas the supply of 5,285 units from the reserve list is close to the 5,135 units from the first half.

“Given the demand crunch for residential sites, developers could be steered towards triggering sites on the reserve list as well as sourcing from the collective sales market,” said Mr Ong Teck Hui, national director, research and consultancy, JLL. 

The collective sales market has been relatively “buoyant” in the first six months of this year, registering S$1.52 billion in transactions, surpassing the S$1.05 billion for the whole of last year, he said.

The most attractive sites on the confirmed list are the Holland Road and Sengkang Central parcels, both mixed development sites with residential and commercial uses allowed, he added.

To date, tenders for three confirmed list sites have been awarded and two confirmed list sites have been launched for sale from the first half of the year. The reserve list site at Stirling Road has been sold, while the reserve list site at Beach Road will be sold by September.

The Government’s main priority is to still look after the “affordability of private home prices for the masses”, but it also has to ensure that prices do not tumble,” said Mr Ong Kah Seng, director, R’ST Research.

“If there is such a shortage of sites for developers to engage in private residential development, they will overbid or bid aggressively for the sites, consequently raising project break-even and hence property selling prices. 

“Already, they are doing this in this year’s bidding, suggesting private home selling prices will be increased for projects launched next year — buyers are generally concerned about this impact to property price affordability,” he noted.