Summary of Residential, Commercial and Hotel Sites in H1 2023 vs H2 2022
Source: Knight Frank Research
The government released the 1H2023 Government Land Sales (GLS) programme on Dec 8, with seven sites on the Confirmed List and nine sites on the Reserve List. Together, the 16 sites can yield a total of 7,715 private residential units, 199,750 sqm (over 2.15 million sq ft) of commercial space and 530 hotel rooms.
“The move to ramp up GLS residential supply – the largest number of dwelling units under the Confirmed List since 1H2014 - is in tune with market needs as private housing demand has outpaced the unsold stock in the past year,” says Ismail Gafoor, CEO of PropNex.
The seven sites on the Confirmed List can be developed into 4,090 residential units. This is only 16.7% higher than the number of units released in the 2H2022 GLS programme, points out Nicholas Mak, head of research and consultancy department, ERA Singapore. In the GLS programme for 1H2022 and 2H2022, the potential number of housing units increased by 39.3% and 25.9% over the preceding period, he observes.
Source: URA, ERA Research & Consultancy
“Although the government is increasing the supply of land for private housing in the 1H2023 GLS programme, the growth rate is slowing,” says Mak. “A possible reason for the slower growth rate in potential housing supply is that the government wants to strike a balance between increasing the private housing supply while being mindful of the potential economic slowdown in 2023.”
“Based on the past five years' data, the average transaction volume is in the range of 8,000 to 11,000 per year,” says Steven Tan, CEO of OrangeTee & Tie. “The increase in supply for 1H2023 to about 4,000 residential units ensures sufficient supply to match the demand after considering supply from the en bloc market. It will have a stabilising effect on home prices.”
The 4,090 units on the Confirmed List will bring the existing pipeline supply of private housing (including ECs) to about 65,000 units. Of these, about 33,600 units will be completed in the next two years, significantly higher than the 11,500 units completed since 2021. “These housing completions will help meet owner-occupier and rental demand in the near term,” says URA.
Source: CBRE Research
Two of the new sites on the Confirmed List are white sites at Marina Gardens Crescent and Jurong Lake District, while another two are residential sites at Champions Way in Woodlands and Media Circle in one-north. The three remaining residential sites -- at Jalan Tembusu, Tampines Street 62 (the executive condo or EC site at Parcel B) and Lentor Central -- were held over from the 2H2022 Reserve List to the 1H2023 Confirmed List.
Despite the property cooling measures imposed in December 2021 and at the end of September, “housing demand continued to outpace supply as Singapore readjusted from the pandemic era,” says Leonard Tay, head of research, Knight Frank Singapore. While the URA Private Residential Rental Index rose by 20.8% in the first nine months of 2022, the Price Index gained 8.2% over the same period, he notes.
Tay expects the private residential site at Champions Way to see strong interest from developers. The site can yield 345 residential units and is located near Woodlands South MRT station on the Thomson-East Coast Line. Located within the Woodlands Regional Centre, new amenities in the area include the upcoming integrated healthcare complex comprising an acute care hospital, community hospital and nursing home due to open progressively over the next two years.
Source: EdgeProp Landlens
The last private residential site in Woodlands sold in the GLS programme was over a decade ago (in June 2011). It was the site at Rosewood Drive, off Woodlands Avenue 2, that has since been developed into the 689-unit Parc Rosewood by Fragrance Group and Aspial Group.
Another suburban residential site that would attract developers on the 1H2023 GLS programme is the EC site at Tampines Street 62 (Parcel B). The 2.8 ha can be developed into a 700-unit EC project. The land parcel is located next to Tenet, a 618-unit EC developed jointly by Qingjian Realty, Santarli Realty and Heeton Holdings. Launched on Dec 3, Tenet saw 447 units (72.3%) sold at an average of $1,360 psf. The average price is a new high for ECs.
Located within walking distance of the upcoming Tampines North MRT station on the Cross Island Line, the EC land parcel could receive bids of $474 million to $500 million if triggered for launch, which translates to $630 to $664 psf pp, estimates Mak.
Source: EdgeProp Landlens
“The GLS site at Media Circle is one of the more attractive sites under the 1H2023 Confirmed List,” says ERA’s Mak. The site is located within a 10-minute walk to One-north MRT station and a five-minute drive to the Ayer Rajah Expressway (AYE), which is one of the major expressways in Singapore. “In addition, the site is surrounded by ample cafes, gyms, healthcare centres and other amenities, which will attract young families and singles,” he adds.
The site at Media Circle can yield 355 units and is close to the office buildings at Mediapolis, Biopolis and Fusionopolis in one-north. “It follows the government’s philosophy to place homes closer to employment centres, creating self-contained communities,” says Knight Frank’s Tay.
ERA’s Mak believes the location at Media Circle will appeal to the younger, chic and tech-savvy homebuyers who may benefit from the proximity to these business parks and those who enjoy a vibrant and modernised neighbourhood.“Furthermore, the future development may attract a pool of investors due to its high rentability potential from the white-collar workers in the precinct.”
Source: EdgeProp Landlens
The white site at Marina Gardens Crescent can be developed into a mixed-use development with a 775-unit residential tower and 65,000 sq ft GFA retail podium with amenities for residents, notes Knight Frank’s Tay. When completed, the homes at Marina Gardens will have views of the CBD, Gardens by the Bay, Marina Reservoir and sea views, “at least, until the other sites in the area are developed”, he adds.
Developers’ unsold inventory of private residential units has also dwindled substantially over the past few years, says Mak. “This is one of the reasons that is fuelling the steady rise in private housing prices.”
With the new residential projects developed on sites sold in the 1H2023 GLS programme launched for sale only after 1H 2024, it would have little impact on housing prices next year, adds Mak.