Should the government have boosted housing supply in its H1 2026 land sales programme?

[SINGAPORE] Various major new condo launches in the second half of 2025 posted strong sales over their launch weekends.

Skye at Holland in the Holland Village area, Penrith in the Queenstown vicinity, LyndenWoods at Singapore Science Park and Springleaf Residence in the Upper Thomson area had sales take-up rates of 99 per cent, 97 per cent, 94 per cent and 92 per cent, respectively, at their launches.

River Valley area projects River Green and Zyon Grand as well as Faber Residence in the Clementi vicinity sold more than 80 per cent of units at their launches.

Huttons Data Analytics estimated that developers’ sales excluding executive condos (ECs) for 2025 will be about 11,000 units – the highest annual sales number since 2021.

Low interest rates are buoying homebuyers. The three-month compounded Singapore overnight rate average was 1.23 per cent per annum as at value date Dec 5, versus 3.02 per cent per annum as at value date Jan 2.

With firm buying demand for new private homes, is it counter-intuitive that the supply of new private homes including ECs from confirmed list sites in the H1 2026 government land sales (GLS) programme was trimmed? 

The nine confirmed list sites in the H1 2026 GLS programme will yield an estimated 4,575 new homes, down 3.2 per cent from an estimated 4,725 units in the H2 2025 GLS programme and 9 per cent lower than the estimated 5,030 units in the H1 2025 GLS programme.

The estimated number of new homes from confirmed list sites in the H1 2024 GLS programme and the H2 2024 GLS programme were 5,450 and 5,050 units, respectively. 

GLS sites on the confirmed list are launched for sale at pre-determined dates and generally sold through tenders.

Certainly, developers can apply for the reserved list sites with housing components on the H1 2026 GLS programme, which may yield a combined estimated 4,610 homes. Still, developers may be reluctant to apply for reserved list sites as they bear market risk.

A reserve list site will be put up for tender when a developer has indicated a minimum price which is accepted by the government. A successful applicant will then sign an agreement and pay a deposit of 3 per cent of the minimum price, subject to a cap of S$5 million.

When the said reserve list site is put up for tender with a minimum price, the developer who triggered the sale of the site needs to submit a valid bid at or above the minimum price or see its deposit forfeited. 

With the strong demand for new private homes in H2 2025, perhaps the housing supply from confirmed list sites in the H1 2026 GLS programme could have been higher – possibly more than 5,000 units.

Moderating housing prices

One, raising new housing supply will help moderate the pace of increase in private home prices.

The Urban Redevelopment Authority’s (URA) property price index of residential properties as at Q3 2025 is up 5.1 per cent year on year. Over this period, the property price index of non-landed homes rose 5.6 per cent.

Between Q3 2020 and Q3 2025, URA’s property price index of residential properties climbed 39.9 per cent, or at a compound annual growth rate of about 6.9 per cent.

In 2024, monthly household employment income including employer Central Provident Fund contributions of the 80th percentile of resident-employed households was S$21,488, which amounts to S$257,856 a year. 

In perspective, paying S$1.9 million or about S$2,100 per square foot (psf) for a new suburban condo unit of 900 square feet amounts to around 7.4 times annual income of S$257,856. 

More than 77 per cent of resident households lived in Housing and Development Board (HDB) dwellings in 2024. 

Amid heightened economic uncertainty, upping new private housing supply to moderate price growth may be prudent. If the global economy weakens, income growth could slow and retrenchments may rise.

Moreover, keeping private housing within reach for a large segment of the population matters as many locals aspire to condo living despite the availability of high-quality HDB homes.

Appetite for housing sites

Two, developers are hungry for housing sites – recent state tenders had strong participation and top bids. 

A condo site next to Newton MRT interchange station drew eight bids and a highest bid of nearly S$1,820 psf per plot ratio (ppr), while a housing plot at Bedok Rise, next to Tanah Merah MRT station, attracted 10 bids and a top bid of about S$1,330 psf ppr.

In Singapore’s fragmented housing development market, providing ample supply of GLS confirmed list housing sites could enable more developers to have a steady pipeline of housing projects. This, in turn, helps with business sustainability.

If developers are hungry for housing sites, risks arise of developers possibly bidding over-aggressively for sites. 

And since land cost is typically the largest cost component of condo projects, rising land costs can lead to higher new home prices. Also, when housing developers pay bullish land prices, the risks of developers running into financial difficulties in the event of external shocks rise. This will in turn have adverse consequences for the housing market and financial institutions.  

Crucially, having more housing supply from confirmed list GLS sites could be useful in moderating land bid prices.

Economic impact

Three, while the government’s fiscal position is strong and the proceeds from the sale of state land go to past reserves, selling more housing sites can help meet housing needs as well as generate economic activity.

A condo project supports construction sector jobs and those of professionals, such as architects and engineers. Also, boosting housing development activities can drive the growth of housing loans and benefit property agents who earn commissions on new home sales.

Certainly, resources in construction and its related sectors could be stretched with major projects going on such as the expansion of the two integrated resorts and the building of Changi Airport’s Terminal 5. Nonetheless, amid a challenging external environment, pumping up domestic property development activities could help the economy.

Ultimately, an opportunity may have been missed by not having a larger supply of new homes on the confirmed list in the H1 2026 GLS programme, as higher supply from confirmed list sites could contribute towards a stable and sustainable housing market.