1H2013 GLS to yield 14,000 new private homes

THE Ministry of National Development will release 23 sites in both the Confirmed and Reserve Lists of the 1H2013 government land sales (GLS) programme for private residential development. The sites will yield 14,035 private residential units, including 3,100 executive condominiums (EC) units. This is comparable to the GLS programme of 2H2012, which saw a supply of 14,185 units.

Twelve sites were released on the Confirmed List for residential development, which include five EC sites. The remaining site on the Confirmed List is a commercial-cum-residential land parcel. In order to cater to strong demand for ECs, and to keep prices in check, the EC land sites accounted for 45% of the estimated new supply in 1H2013.

Analysts say the move is a strong signal to the market that land supply remains ample, in a bid to control the continuing increase of real estate prices. "Evidently, the government is not going to ease off on land supply for private residential development until private housing price movements are stable," observes Chia Siew Chuin, director of research and advisory, Colliers International.

However, Nicholas Mak, executive director, research and consultancy, SLP International Property Consultants points out that even after six rounds of cooling measures, the property market is still experiencing robust residential sales. "In the first nine months of this year, developers sold 17,800 private homes, which exceeded the 15,900 units sold in the whole of 2011," says Mak. Most of the units sold were located in suburban areas.

Sites that are expected to attract strong interest and high bids are in the prime districts, namely the land parcels on Coronation Road (District 10), Mount Sophia (District 9) and Siglap Road (District 15).

EC land prices have risen in the past year as evident from recent land tenders, notes Png Poh Soon, director, head of consultancy and research at Knight Frank. For instance, an EC site at Punggol Field Walk/Punggol East was sold in December at S$351 psf per plot ratio (ppr), 12% higher than a nearby EC site at Punggol Way/Punggol Walk that was sold in September at S$314 psf ppr.

Year-to-date, the government has sold 19 land parcels for private housing and 12 EC sites. In the 31 residential GLS tenders that had concluded this year, an average of eight bids were received for each land tender, indicating a strong level of developers' participation, says Mak.

This story first appeared in The Edge Singapore weekly edition of Dec 24-31, 2012.