Home supply to shrink as Government tightens land sales

SINGAPORE — The Government has reduced the supply of new homes in its latest half-yearly land sales programme, with the lowest number of residential units available in five years, as it seeks to balance a market facing record pipeline supply and waning demand.

Six residential sites, two mixed-use plots and one commercial land parcel will be made available under the Confirmed List of the Government Land Sales (GLS) programme for the second half of this year, the Ministry of National Development (MND) said yesterday.

This will yield an estimated 3,915 private homes, including 1,520 executive condominium (EC) units, as well as 158,860sqm of commercial space. The number of homes is down from the estimated 4,630 units that could be developed from the Confirmed List of the first-half GLS programme.

“The supply from the 2H2014 GLS programme, together with the large supply from projects in the pipeline, is expected to be adequate to meet the demand for private housing and commercial space over the next few years,” the MND said.

The Reserve List is made up of 12 residential sites, a commercial site and a white site. White sites can be developed for residential, commercial or hotel projects, or a mix of such uses. The Reserve List sites can yield an estimated 6,305 homes and 193,280sqm of commercial space.

Reserve List sites are put up for tender only after a developer commits to bid at a price acceptable to the Government. No Reserve List sites in the first-half GLS were triggered for sale and they were carried over into the second-half programme, the MND said.

The total number of homes available under the second-half GLS is 10,220, down from 11,585 in the previous six months, and the fewest since the second half of 2009.

Ms Christine Li, head of research and consultancy at property agency OrangeTee, called the latest GLS announcement a good indication of the Government’s continued effort to strike a balance between demand and supply amid growing housing supply and dwindling demand due to cooling measures and loan curbs.

Ms Chia Siew Chuin, director of research and advisory at real estate consultancy Colliers International, pointed out that the second-half GLS comes amid a record supply of up to 83,044 new private homes being completed between now and 2018.

“The residential property market is showing signs of stability and is slowing down substantially from the heady days of 2012 and early 2013,” she said.

Ms Chia noted that while the number of private homes that can be developed was trimmed slightly, there was a significant reduction for executive condominiums — by 45 per cent to 1,520 units from the 2,770 EC units available in the first-half GLS.

“While there may still be fundamental demand for ECs, the Government could have recognised that much of the housing demand arising from organic population growth and family formations has been and is likely to continue to be addressed by the Housing and Development Board’s (HDB) release of Build-To-Order flats,” she said.

Among the sites on offer in the latest GLS, analysts highlighted several as being attractive and likely to be well-received despite the slowing market.

These include the sites at Holland Road, Tampines Road and Jurong West. The Holland Road site is part of the revitalisation of Holland Village, while the other two are near MRT stations and schools.

Mr Nicholas Mak, executive director for research and consultancy at property firm SLP International, said some developers may still be looking to build up their land banks in anticipation of the market swinging back in their favour at some point.

“However, some developers may want to build up their land bank only at an attractive price or look overseas to do it,” he said.

Outside of the GLS programme, the Government will make available other land and properties in the second half of this year, such as retail facilities at HDB estates, industrial estates, MRT stations, as well as the leasing of vacant state properties for commercial uses, the MND said.