Quick takes: Singapore's cut in land supply for residential development largely expected

THE Singapore Government released on Thursday the second half 2015 Government Land Sales (GLS) Programme with four Confirmed List sites and 13 Reserve List sites that could yield more than 7,800 private residencial units.

Here are some comments from real estate experts:

Cushman & Wakefield, Singapore:

"It is hardly surprising that the Singapore government continues to taper the land supply for residential segment in the 2H2015 GLS programme in light of the cooled market sentiment and prices. The emphasis of the government has clearly shifted from supply-side measures to keep a lid on the price growth to just maintaining sufficient supply to meet the long-term housing demand.''

"We think that the policy intent is to ensure that there is still plenty of choices available in the market for developers who are still keen on land banking, as the recent GLS sites still attracted healthy participations and land bids. There is also neither commercial nor hotel site given the ample supply of commercial and hotel space in the near- to medium-term.''

"The non-EC private residential units faced a more drastic cut of 36% to 1,610 units, which is somewhat below market expectation. This actually demonstrated the confidence of the government that the series of demand-side cooling measures through ABSD and TDSR have already worked and a turnaround in the residential market is not going to happen any time soon despite a steeper cut in the supply. URA residential PPI has declined by about 5.9% from the peak in 3Q2013."

"Even though there was a call for the government not to release any EC sites in the confirmed list, the MND still moved the Yio Chu Kang Road (EC) from the reserve list in 1H 2015 to the confirmed list. We think that it is to continue channelling the upgrader's demand to the hybrid housing product which is less investment intensive and more consumption-driven."

ERA:

"This move to reduce supply is largely expected as the existing pipeline supply with these sites added is about 84,000 units (including Executive Condominiums)."

"Sales of units by developers have also slowed down significantly post-TDSR (since June 2013); and the slowdown in government land sales is welcome move to allow for unit sales to catch up."