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Government increases supply of land for housing amid strong developer demand

SINGAPORE — The Government has increased the amount of land it plans to sell for private housing development in the first half of next year, a move that property analysts said is in response to strong participation by developers in recent site tenders.

The Government increased the supply of land for private homes by 7 per cent for the first half of 2017. TODAY file photo

The Government increased the supply of land for private homes by 7 per cent for the first half of 2017. TODAY file photo

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SINGAPORE — The Government has increased the amount of land it plans to sell for private housing development in the first half of next year, a move that property analysts said is in response to strong participation by developers in recent site tenders.

Under the Government Land Sales (GLS) programme for the first half of 2017, five private residential sites that can yield about 2,330 homes will be made available under the Confirmed List, the Ministry of National Development (MND) said on Friday (Dec 16). This is 7.4 per cent more than the 2,170 units on the Confirmed List for the last six months of this year, and only the second increase since the Government started tapering housing supply in the GLS programme in 2013. 

“This is on the back of improved sales momentum, strong participation in the recent GLS programme among developers and higher land bids received. The hunger for land has also extended into the Reserve List and even the private en bloc market, where three en bloc deals took place in 2016 with transaction value amounting to approximately S$1 billion,” said Cushman & Wakefield’s research director Christine Li. 

Earlier this month, a Margaret Drive site that can yield about 275 homes attracted 14 bids from developers, with the highest bid for the Reserve List land parcel amounting to S$238.39 million, or nearly S$998 per sqf per plot ratio. 

“It has become clear to the Government that it needs to step up land supply in order to find the right balance to meet the market demand and maintain a stable housing market over the short to medium term,” said Ms Li. 

Besides the Confirmed List sites — which will be put up for sale regardless of market interest — the Government has also unveiled 10 sites on the Reserve List that can be triggered for sale if there is sufficient interest, such as when a developer makes an acceptable opening offer. The Reserve List comprising a mixture of residential and commercial sites can yield about 5,135 dwelling units, down from 5,375 in the previous programme — a difference that analysts said is insignificant. 

Analysts said going by the developers’ appetite for land, the tenders for GLS sites will likely remain competitive. Of the Confirmed List sites, they singled out the condominium site at Woodleigh Lane that can yield about 735 homes as the one likely to be most hotly contested given its location right next to the Woodleigh MRT station in the city fringe. The landed housing parcel at Lorong 1 Realty Park that can be developed into about 50 dwelling units will also likely draw keen interest from developers, given its small size and the limited landed home supply in recent years, they added.

Developers are also expected to be drawn to sites on the Reserve List, especially the ones at Jiak Kim Street and Fourth Avenue, both located within the Core Central Region. The two sites can yield nearly 1,000 homes.

“It is quite rare for the Government to offer residential development sites in District 9 and 10 … Since the Government only increased the number of sites in the Confirmed List marginally, there is a possibility that one to two Reserve List sites could be triggered for tender by developers who want to replenish their land banks,” said Mr Nicholas Mak, head of research and consultancy at SLP International Property Consultants.

As with the previous GLS programme, there were no executive condominium (EC) plots in the latest Confirmed List. The sole EC land parcel on the Reserve List, located at Sumang Walk in Punggol, was brought over from previous GLS line-ups. The lack of EC offerings will provide some support to the hybrid public-private home segment, said Mr Desmond Sim, head of CBRE Research in Singapore and South-east Asia.

“Even if it is triggered for sale, the resultant project would only be launched in 2018. Just three EC projects yielding about 1,600 units are expected to be launched for sale next year, in addition to the remaining stock of 3,000 unsold units. Going by the strong demand for ECs in 2016, it is possible that all EC units will be sold in 2017,” he added.

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