The Singapore government has announced 13 sites under the 1H2022 Government Land Sales (GLS) programme. Its 1H2022 GLS list includes five Confirmed List sites as well as eight Reserve List sites. This is coming as the government has promised to boost the number of public and private housing development sites in its announcement of the latest round of cooling measures close to midnight on December 15.
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“To ensure there is enough private housing to satisfy demand and maintain market stability The government has taken the decision to boost the supply of housing for private households listed on its Confirmed List by 27855 units under 1H2022 GLS Programme. 1H2022 GLS Programme, from 2000 units in 2H2021 GLS Programme. 2H2021 GLS Programme,” according to MND in a press release on Dec 16. Ministry of National Development (MND) in an announcement on December 16.
MND adds it is ready to increase supply in the event that demand continues to be strong.
The five sites listed on the Confirmed List comprise four residential private sites as well as the executive Condominium (EC) site. The 4 sites that are not EC sites could yield around 2,290 residential units for private residents, and one EC site could produce 495 EC units.
The eight sites that are listed on the Reserve List comprise four private residential sites and one EC site as well as two White sites and one hotel site. Should all the sites were put up to sell the potential yield could be 3,715 private residential units comprising 700 EC units as well as 968,400 square feet of commercial space and the hotel room of 530.
“With the decreasing number of inventory of unsold units in the market, it’s obvious that developers have be replenishing their land reserves and the increase in supply of land is good news. However, the increase in the amount of land available and the cooling measures that are dampening demand is likely to put downward pressure on land auctions. This could have an impact on the final price of sale,” says Mark Yip the CEO of Huttons Asia.
The number of new units could be “relatively unaltered” starting in 2021. GLS lists
But Alice Tan, head of consulting within Knight Frank, says that the total number of possible private residential properties remains similar to the GLS lists for 2021. “When combing all lists of Confirmed as well as Reserve Lists together, the total number of new private residential units fell in 5.2%, from 6,860 units in 2H2021 to 6,500 units by the 1H2022 period,” says Tan.
In the midst of a decreasing inventory of private homes that are new to the market, construction delays and the lingering interest from buyers who are genuine and the rise in the total amount of housing units that are being developed in the Confirmed List for the 1H2022 GLS programme can be considered “muted” according to the report.
Tan claims that over the next six months, developers are more likely to be triggered by smaller sites listed on the Reserve List, especially ones with fewer than 600 units. Tan says this are possible to build. Larger sites are not as appealing due to the rise in A.B.S.D., which is now 35% for housing developers.
More GLS land is released to the public in RCR and OCR
“The sites on the Confirmed List are located in the Rest of Central (RCR) and Outside Central Region (OCR). This is an apt boost in supply, as the demand for homes in these two markets is extremely strong and is bolstered by Singaporean buyers who are looking to improve their homes or join the private housing market,” says Ismail Gafoor who is the Chief Executive Officer of PropNex Realty.
According to information from PropNex according to PropNex, at the 3Q2021 end date the un-sold stock within the Core Central Region was 6,880 units. Within the RCR there were 5,878 units that had not been sold, in addition to 4,382 newly-built units at the OCR.
The site which could produce the most unit is an area of 271,251 square foot site located at Dunman Road that could yield 1,035 units. Based on Wong Xian Yang, head of research Singapore in Cushman & Wakefield, the site is well-located due the proximity of Dakota MRT station and close to amenities like food centres like the Old Airport Road food centre.
“While those recent cool measures could reduce the demand for the site due to its size and the higher risk of development, demand from owners for future development is likely to be robust due to its locational strengths. This means that larger developers or consortiums will be attracted to such a site,” says Wong.
The 1H2022 GLS program also comprises three residential sites located in Lentor. Two confirmed List sites in Lentor Central and Lentor Hills Road (Parcel B), and the Reserve List site at Lentor Gardens. Mark Yip of Huttons Asia believes that this could be due to the growing demand for housing development in the Lentor area , as well as the launch of Lentor MRT Station in the month of August of this year.
The launch of the EC site located at Bukit Batok West Avenue on the Confirmed List will also to meet the growing demand for upgrading of the residents living in that area, according to Yip. “Up to 7,788 three-room and five-room HDB flats were built from 2015 until 2018. (in the Bukit Batok West Avenue 5 region) and will be an opportunity to pool HDB upgraders to the EC when it goes up to be sold.”