Govt trims land sales amid large supply, softer demand

The upcoming supply is nearly 20 percent lower than the over 8,000 units provided in the second half of 2018.

The government revealed last week that it will release five confirmed list sites and nine reserve list sites for sale under the first half 2019 Government Land Sales (GLS) programme that can collectively yield about 6,475 private homes, including executive condominiums (ECs).

According to Colliers International, the figure is 19.5 percent lower than the 8,040 units provided in the second half of 2018. It is also the lowest half-yearly stock of residential units since H1 2007 when 5,475 units were offered.

“In trimming the land supply, the government seeks to ensure that the property market remains sustainable in an environment of heightened uncertainty, global trade tensions and looming interest rate hikes,” said Tricia Song, the property consultancy’s research head for Singapore.

In fact, the government said it moderated the supply of land for private housing under the first half 2019 GLS programme as incoming stock has increased substantially and currently stands at 45,000 units.

These consist of some 31,000 unsold units in GLS and en bloc sites with planning approval, and an additional 14,000 units from sites with pending planning approval. On top of that, there are about 28,000 completed private residential units that are still vacant.

The authorities also pointed out that private home sales have begun to moderate after the introduction of property cooling measures on 6 July, while the appetite for land among developers has eased.

Among the confirmed list sites, the Tan Quee Lan Street plot is considered the most attractive as it is adjacent to Bugis MRT station, noted Tay Huey Ying, JLL’s head of research and consultancy for Singapore.

“The fact that the government has moved the site from the reserve list on the H2 2018 GLS programme to the confirmed list on the H1 2019 GLS programme indicates its desire to build on the momentum gathered from the completion of new skyscraper developments such as South Beach and DUO, as well as the upcoming Guoco Midtown scheduled for completion in 2022 in its efforts to rejuvenate the Bugis area.

More: Guoco Midtown Project In Beach Road To Feature 200 Homes

“However, it is a fairly large site and together with its prime location could translate to a rather substantial capital outlay that could limit the number of interested bidders to those with larger risk appetite.”

Experts also believe the confirmed list sites at Bernam Street and one-north Gateway could see a healthy level of interest from home builders due to their bite-size plot sizes.

“The Bernam Street site is a rare fresh site in the mostly built-up Shenton Way CBD and near the future Greater Southern Waterfront development. The last time a residential site was offered in that area was back in 2007 – two sites in Enggor Street, which had been developed into Altez and Skysuites @ Anson respectively,” noted Colliers.

“The one-north Gateway site is also in a location which has been starved of new residential supply. The last time a new residential project was launched in one-north was more than 10 years ago when The Rochester and One North Residences were launched for sale in 2007,” added Tay.

As for the Canberra Link EC site, it is expected to see keen competition from developers as its the only confirmed list EC site in the H1 2019 GLS Programme, although it is slightly farther from the upcoming Canberra MRT station compared to the adjacent EC site released for sale in September.

Among the reserve list plots, the land parcel along Dunman Road is the most appealing for property analysts.

“We view the Dunman Road site as the most attractive site on the reserve list given its proximity to Dakota MRT station, predominantly unblocked views of the East Coast and within minutes’ drive to town. It is also near good schools and the upcoming Paya Lebar Quarter. However, a concern could be its relatively larger size – 1,070 buildable units,” noted Colliers.

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Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg