MND keeps land supply for private homes in H1 2018 at about same level as H2 2017

THE government has decided to keep the total supply of land for private residential development for the first half of next year at about the same level as that for the current H2 2017 slate, citing among other factors, sufficient supply from the redevelopment of collective sale sites being generated from the private sector.

The Ministry of National Development (MND) said on Wednesday morning that under its H1 2018 Government Land Sales (GLS) Programme, it will be offering land that can potentially yield about 8,045 private homes (including executive condominium or EC units) and 63,960 square metres gross floor area (GFA) of commercial space.

This is compared with the 8,125 private residential units (including EC units) and 83,590 sq m GFA of commercial space on both confirmed and reserve lists in the current H2 2017 slate.

For H1 2018, through the confirmed list, the MND will release six private residential sites (including one EC site) that can yield 2,775 private homes (including 450 EC units) and 4,450 sq m GFA of commercial space. In comparison, it is releasing land for 2,840 private residential units (including ECs) and 26,800 sq m GFA of commercial space in the H2 2017 programme. Confirmed list sites are launched according to schedule regardless of demand.

On the reserve list, the government will offer eight private residential sites (including two EC sites) and one commercial site. These sites can yield 5,270 private homes (including 1,255 EC units) and 59,510 sq m GFA of commercial space. This is similar to the H2 2017 reserve list supply of 5,285 private residential units and 56,790 sq m GFA of commercial space.

Reserve-list sites are launched only upon successful application by a developer or when there is sufficient market interest in a site.

In working out the supply for the H1 2018 GLS Programme, the government had taken into consideration several factors. Commenting on the private residential market, the MND said: "On the one hand, there is strong demand for sites by real estate developers, and a pick-up in transaction volumes. On the other hand, there is a large potential supply of around 20,000 units from awarded en-bloc sale and GLS sites that have not yet been granted planning approval, on top of the around 18,000 unsold units that already have planning approval."

Moreover, there are more than 30,000 existing private housing units that remain vacant, the ministry added.

"Therefore, on balance, the government has decided to keep the total supply of units for H1 2018 at about the same level as the supply of units from the H2 2017 GLS Programme."

Taken together, the total supply in the pipeline, including the units from the H1 2018 GLS Programme, will be adequate to meet the purchase demand for new private housing from homebuyers over the next one to two years.

"When these are completed, the overall stock of private housing will be more than sufficient to meet Singaporeans' housing needs," it added.

The H1 2018 reserve list will have one site at Woodlands Square for a mixed-use development comprising mainly office space. "This site will allow developers to initiate the development of more office space if they assess that there is demand," the MND said.

The confirmed list sites on the H1 2018 programme include a land parcel in Dairy Farm Road that can generate about 500 private homes and 4,000 sq m of commercial space, and plot in Jalan Jurong Kechil that can yield about 280 private homes. The sole EC site on the confirmed list, which can generate about 450 units, is along Canberra Link in the Sembawang area.

The new reserve list sites include a plot along Sims Drive that can yield about 680 private homes and a site in Peck Seah Street near Tanjong Pagar MRT Station for about 700 private homes and 4,500 sq m of commercial space. Another new site, in Clementi Avenue 1, can yield up to 640 private homes. The two EC sites on the reserve list are in Tampines Avenue 10 (for about 715 EC units) and Anchorvale Crescent (for about 540 units).

Property consultants generally agreed with the MND's approach for the next half GLS Programme, Edmund Tie & Company's head of research, Lee Nai Jia, said: "With more supply emanating from collective sales, the measured approach by the government will reduce the likelihood of an oversupply situation two to three years down the road."

In similar vein, ZACD Group executive director Nicholas Mak said: "The government is trying to maintain a balance between developers' hunger for land and the housing needs of Singaporeans, bearing in mind the large potential supply of completed units in the next two to four years.

"The government would want to prevent a housing glut in the leasing market in the near future. If such an unfortunate event were to happen, it could become a quagmire for the market."

Giving her take, Cushman and Wakefield research director Christine Li said: "With little change in the GLS Programme, we expect the aggressive bidding behaviour by developers in both the public tender and the collective sale market to ensue in 2018."

Colliers International head of research, Singapore, Tricia Song, said that among the sites in the first-half 2018 confirmed list, the Cuscaden Road private housing site, which can yield about 170 units, is the most attractive. This "rare luxury housing site" should ride on the positive momentum from the recent sale of the prime Jiak Kim site, she added.

She also finds the site in Mattar Road interesting as it is very near the Mattar MRT Station on the Downtown Line, with very limited competitive supply in the locality.

The Canberra Link EC plot will also be popular as there is limited EC supply and this site is near the future Canberra MRT station, she added.

As for the reserve list sites, she deems the Sims Drive and Peck Seah Street land parcels as the most attractive and likely to be triggered.