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Govt keeps H2 GLS housing supply on par with H1
THE government is seen taking a balanced approach in ensuring adequate residential land supply in the second half of this year to meet homebuyers' demand without exacerbating a potential supply glut, consultants say.
It has kept residential land supply in the second half of 2018 under the government land sales (GLS) programme on par with that in the first half of this year, again preferring to keep the majority (66 per cent) of total residential land supply under the Reserve List to be triggered for sale only by market forces.
Six sites on the Confirmed List for H2 2018 comprise four private residential sites, including one executive condominium (EC) plot, one "white" site and one hotel site. They can collectively yield 2,705 private residential units (including 695 executive condominium or EC units), 42,200 square metres of gross commercial space and 390 hotel rooms.
A "white" site is a land parcel where developers are free to decide on the mix of uses and the respective quantum of floor space of each use as long as the total permissible gross floor area (GFA) is maintained for the whole development.
Another nine sites are placed under the Reserve List for H2 2018. These will be triggered for sale if a developer's indicated minimum price in his application is acceptable or there is sufficient market interest in the site.
These Reserve List sites comprise seven private residential sites - including one EC site, and two "white" sites. They can collectively yield 5,335 private residential units (including 515 EC units), 82,000 sq m of gross commercial space and 540 hotel rooms.
All in, sites under the Confirmed List and Reserve List can yield up to 8,040 private residential units, 124,200 sq m of commercial GFA and 930 hotel rooms, the Urban Redevelopment Authority (URA) said on Wednesday.
The residential land supply in H2 2018 GLS is similar to that in H1 2018 when the government made available 2,775 residential units under the Confirmed List and 5,270 units under the Reserve List.
OrangeTee & Tie head of consultancy and research Christine Sun noted that despite a sizeable number of new supply that can come from the recent collective sales, "the government has probably chosen to maintain the land supply as they want to control the escalating property prices by injecting a reasonable number of new units without causing an oversupply situation".
The URA's explanation threw light on such a view. In the supply pipeline are around 20,000 units from GLS and en-bloc sale sites pending planning approval, on top of the 24,000 unsold units from projects with planning approval. In addition, more than 30,000 existing private housing units remain vacant.
But demand for land from developers remain strong while transaction volumes are rising, the URA said. "Taken together, the total supply in the pipeline will be able to meet homebuyers' demand over the next one to two years, and to meet our population's housing needs. The government will continue to monitor the property market closely and adjust the supply from future GLS programmes, when necessary."
But Huttons Asia head of research Lee Sze Teck felt it is puzzling that there has not been an increase in land supply for ECs in H2 2018 despite evidence showing strong demand for such projects. "The timing of the launch of the EC site in October will only exacerbate the tight supply of ECs."
JLL national research director Ong Teck Hui noted that the focus for residential GLS sites seems to be in the central region, which accounts for 79 per cent of collective sale sites sold in H1 2018 to-date. "Although the three GLS sites (on the Confirmed List) could help to meet demand from developers, it is uncertain as to whether they will mitigate optimistic land prices," he added. "They are also unlikely to dilute demand for collective sale sites, especially those in the prime districts for which there is keen interest."
For commercial land supply, there is a jump in both the Confirmed and Reserved List of H2 2018 - representing a 94 per cent surge in total commercial GFA compared to H1 2018.
Consultants note that there has been no major GLS commercial site near Pasir Ris MRT station sold since 1993. Hence, the "white" site at Pasir Ris Central on the Confirmed List is likely to garner healthy interest from the big developers or consortiums as well as those with strong retail expertise.
The two "white" sites on the Reserve List for the second-half of 2018 are located at Woodlands Square/Woodlands Avenue 2 and Marina View.
CBRE head of research for Singapore and South-east Asia Desmond Sim noted that the Woodlands site can re-emphasise the focal point of the Woodlands Square vicinity, especially with the Johor Bahru-Singapore Rapid Transit System link in place and the future development of the North Coast Innovation Corridor.
For the first time in five years, the government is also offering hotel room supply in its GLS programme amid rosier tourism outlook for Singapore in the next few years. This came on the back of a 6.2 per cent growth in international visitor arrivals last year to 17.4 million visitors.
"Given the bright tourism prospects ahead, we believe the hoteliers would be very keen on the hotel offerings on both the Confirmed List and Reserve List," said Govinda Singh, executive director of valuation and advisory for Asia at Colliers International.
"The Club Street plot sits within a high demand area in Chinatown for both corporate and leisure and plugs well into the rejuvenation of the Tanjong Pagar district nearby," Mr Singh said. "The Marina View White Site also presents good opportunities, being in the prime downtown, which has been earmarked as an exciting waterfront destination in the future."
Consultants pointed out that several other sites on the Reserve List look attractive and could be triggered for sale. OrangeTee & Tie's Ms Sun cited residential sites at Dairy Farm Walk, Clementi Avenue 1 and Anchorvale Crescent EC as having the potential of being triggered by developers for sale.
ZACD executive director Nicholas Mak reckoned that residential sites at Anchorvale Crescent (EC site) and Tan Quee Lan Street on the Reserve List may be triggered for sale, while residential sites at Kampong Java Road and Middle Road on the Confirmed List may garner strong interest from developers.