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Govt estimates doubling of new private housing units in the next 1-2 years: Lawrence Wong
THE government is expecting a more than doubling of private residential units available for sale over the next one to two years, Minister for National Development Lawrence Wong said on Tuesday.
A large portion of the supply is coming from the redevelopment of projects that have been sold en bloc, on top of continued supply from the government land sales (GLS) programme.
With more than enough supply to meet housing demand, Mr Wong urged buyers to do their homework before making their purchases.
To drive home his point, Mr Wong pointed out that the vacancy rate for private residential units remain elevated at 8.4 per cent and has stayed above 8 per cent for almost two years. The last time that vacancies stayed at such elevated levels was more than 10 years ago in 2005, he said.
"What this means is that, in terms of actual physical units, there are currently more than 30,000 vacant private housing units - all still looking for occupants," Mr Wong said. "To put things in perspective, this is more than the total number of dwelling units in the whole of Bishan today."
He was speaking at the 58th anniversary dinner of the Real Estate Developers' Association of Singapore (Redas), where he again sounded a word of caution to developers on the risk of over-aggressive land bids.
Mr Wong also reminded developers of the need to deliver properties with good quality workmanship, and hinted at possible actions against those who compromise on quality.
He flagged that with higher land prices and the condition under the Additional Buyer's Stamp Duty (ABSD) to finish building and selling the project within five years of the site being awarded or risk paying penalties, developers' profit margins may come under some pressure. There is a risk that this could impact construction quality.
While the vast majority of developers are responsible and will not compromise on quality, the government has received feedback from time to time on developers who do not meet the quality standards expected of them, he said.
"I have asked URA (Urban Redevelopment Authority) and BCA (Building & Construction Authority) to step up their regulatory checks," Mr Wong told developers at the dinner at Shangri-La Hotel.
For those with a poor track record, the government will consider further measures to hold them to higher standards of accountability, such as a licence condition for them to obtain Quality Mark certification for their projects.
The government may even disallow these developers from launching units for sale until it can be certain that they are committed to meeting these standards.
"In working out these tighter regulatory measures, we're mindful not to take a blunt one-size-fits-all approach that will affect all developers but to differentiate the black sheep from the responsible developers," Mr Wong said.
The government also strives to strike a balance between staying vigilant in monitoring the market closely, while accepting that there will be ups and downs in the property market.
"As far as possible, we make use of the various levers we have to achieve a more stable and sustainable property market," he added.
This is the second time in a row that Mr Wong has spoken on developers' land-bidding behaviour. Last week in Parliament, Mr Wong said that the higher land bids by developers may not translate to higher selling prices when they launch the project as they are ultimately subject to demand and supply forces in the market.
Redas president Augustine Tan, however, has a different view of developers' bidding behaviour.
He noted that in the purchase of sites from the GLS programme or private collective sites, the market has seen "different risk appetites of developers who had different views on how supply and demand would pan out".
"They would have considered the geopolitical landscape, economic conditions and that all the property measures are still in place," Mr Tan said in his speech on Tuesday.
This year, the government injected a larger supply of residential sites through the GLS programme. The total supply of 11,225 residential units injected for the whole of 2017 is 38 per cent higher than the 8,135 private residential units in the 2016 GLS list, Mr Tan noted.
In 2016 and 2017, there have been 25 successful collective sales with a potential yield of some 12,800 new residential units.
Another nine residential developments with a potential yield of about 2,900 units have started en bloc sale proceedings, based on Redas estimates. Almost 27,000 units could be available for sale in 2018 and 2019.
Mr Tan said: "Although there is no visibility on how the economy will pan out in 2018 and 2019, the government has assured that it will continue to monitor the overall property market trends closely and take appropriate actions to maintain a stable and sustainable market in Singapore."