Supply of Land Sales Sites for Homes to Hit 9-year Low

The supply of new government land earmarked for residential use will hit a nine-year low in the first half of next year.

The 16 sites to be released through the Government Land Sales (GLS) programme can yield up to 7,420 private homes.

This is slightly lower than the 7,825 homes offered in this half of the year and the lowest since the first half of 2007.

Four sites are on the confirmed list for the first half of next year: residential ones in Jalan Kandis (Sembawang) and Martin Place, near River Valley Road; an Anchorvale Lane executive condominium (EC) plot; and a mixed-use parcel in Bukit Batok West Avenue. They can yield about 1,560 homes, including 640 EC units, and 11,000 sq m of gross floor area of commercial space. Existing executive condo in the market include The Terrace EC, Waterwoods EC, Bellewaters EC, Bellewoods EC, Skypark Residences ,The Brownstone EC, Signature EC At Yishun while upcoming ones include Parc Life EC and The Visionaire EC and Wandervale EC.

“We think the supply has been adjusted to maintain the calibrated correction in the housing market – a delicate balance between long- term housing demand and keeping developers gainfully engaged,” said Dr Chua Yang Liang, JLL head of research for South-East Asia and Singapore.

The Martin Place site will likely spark market interest, given its rarity, analysts said. The last time a site in the area was sold through the GLS programme was in 2011 when a Robertson Quay plot was snapped up.

R’ST Research director Ong Kah Seng said it is a “major development and, considering headwinds for the high-end residential segment, developers will be cautious in bidding for this site”.

The reserve list comprises 12 sites: eight residential, including one for ECs, a mixed-use plot, two commercial parcels and a white site. They can yield 5,860 homes, including 820 EC units, and 261,600 sq m of commercial gross floor area, mostly for office use, said the National Development Ministry in a statement yesterday.

Confirmed-list sites are put on sale regardless of interest, while those on the reserve list are launched only when a developer commits to a bid deemed acceptable.

Analysts said the mixed-use site in Holland Road and a residential plot in Margaret Drive, which are on the reserve list, may interest developers, given their attractive locations.

However, real estate consultants say the supply of new homes and vacancy rate bear watching. There is a pipeline of about 73,000 private residential units, including ECs, due to be completed by 2019 and beyond.

“Each year, we need about 8,000 to 10,000 units. To have more than 70,000 units in over four years is way too much. And that’s not counting the massive supply of public housing flats,” said Mr Ku Swee Yong, chief executive officer of Century 21 Singapore.

Knight Frank Singapore consultancy and research head Alice Tan also flagged concerns about the large proportion of mass-market homes in the supply pipeline next year. “The supply situation would be of concern especially for next year, with 55 per cent of private homes in 2016 located in the outside central region,” she added. A total of 22,351 units of private homes, excluding ECs, are due to be completed next year.

Not counting ECs, analysts project new home sales to come in at around 7,500 units this year, up from the 7,400 sold last year. Just over 7,100 new homes have been sold between January and November this year.

Consultancy Colliers International said: “As long as the cooling measures and loan curbs remain in place, coupled with the Federal Reserve’s rate hike announcement yesterday, sentiment in the private residential market is expected to remain subdued. ”

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