Government Cuts Housing Land Supply Again

SINGAPORE — The Government has once again cut land supply for residential development under its biannual sales programme, bringing it to a new low since the global financial crisis in 2009.

Under the Government Land Sales (GLS) programme for the first half of next year, three private residential sites including one Executive Condominium (EC) site and one commercial and residential site will be made available under the Confirmed List, the Ministry of National Development (MND) said yesterday. Existing executive condo in the market include The Terrace EC, Waterwoods EC, Bellewaters EC, Bellewoods EC, The Vales ECSkypark Residences ,The Brownstone EC, Signature EC At Yishun while upcoming ones include Parc Life EC and The Visionaire EC and Wandervale EC.

These sites, located in Outside Central Region and Core Central Region (CCR), are expected to add about 1,560 homes, including 640 EC units, to the existing pipeline supply of about 73,000 private residential units (including ECs). They will also add 11,000 sqm gross floor area (GFA) of commercial space.

Analysts note the Confirmed List housing supply for the upcoming programme is 27 per cent lower than the 2,130 units under the same category in the second half of this year. It is also the lowest since 2009, when Confirmed List site sales were suspended during the global credit crunch.

“The supply of private housing and commercial space from the GLS Programme, together with supply from projects in the pipeline, will be adequate to meet the demand for private housing and commercial space over the next few years,” MND said.

The latest GLS programme, said Ms Christine Li, research director at Cushman and Wakefield, shows the Government’s confidence in past cooling measures and that loan curbs have successfully reined in the prices.

“Despite the reduced supply of private residential units, a price rebound is deemed unlikely by the Government. It reflects the cautious approach by the Government in managing the pipeline supply and vacancy situation going forward after multi-year record completions,” Ms Li said.

Islandwide vacancy rates, she said, are expected to exceed 10 per cent by next year, against 9.1 per cent in the third quarter of this year, amid slower employment growth and a weaker economic outlook.

The most attractive of the Confirmed List sites is the plot at Martin Place at Robertson Quay, analysts said. “However, given the supply overhang in the CCR, developers are likely to be cautious when bidding for the site. Sales of units by developers have slowed down significantly post-TDSR (Total Debt Servicing Ratio) since June 2013,” Mr Eugene Lim, key executive officer at ERA Real Estate, said.

Besides the land parcels on the Confirmed List that will be put up for sale regardless of market interest, there are 12 other 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. These include eight residential sites — one of which is earmarked for EC development — one mixed commercial and residential site, two commercial sites and one white site.

These sites can yield about 5,860 private homes including 820 EC units and 261,600 sqm GFA of commercial space, mostly for office use.

Mr Desmond Sim, head of CBRE Research (Singapore & South East Asia) expects developers to possibly trigger a few sites in the Reserve List, including the ones along Stirling Road and possibly the New Upper Changi plot opposite Tanah Merah MRT Station as well as the Margaret Drive site.

“Despite the slightly better performing market from a year ago, the overhang still needs time to be absorbed and will be a factor in determining the number and price of bids for each tender. Overall, the winning margins will be narrow for all tenders,” Mr Sim added.

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