Fewer sites may be offered in upcoming land sales programme: market watchers

The government is expected to announce its land sales programme for the second half of 2013 soon.

Analysts expect the state to continue to put out an adequate supply of sites to meet housing demand.

But some market watchers suggest that perhaps fewer sites can be offered under the Confirmed List to keep supply in check.

In the first half of 2013, the government has set aside 12 residential sites for sale under the Confirmed List.

They are expected to yield some 6,900 private homes, including executive condominiums.

For the next six months, some analysts said there is room for the government to scale back its land sales programme.

Real estate agency PropNex suggested that the government could cut supply to between 5,000 and 5,500 units on the Confirmed List. PropNex said the Reserve List could offer sites yielding another 4,000 to 5,000 units.

Mohd Ismail, CEO of PropNex, said: “Today, for many of the take-up rates have been very much subdued, not like in the past when demand was higher, therefore bringing it down will be a good way to monitor the market as prices have more or less stabilised at the moment. It is important to monitor so that we don’t create a glut in the market whereby property prices start to tumble or major correction.”

Meanwhile, property consultancy Savills said the government could also put more sites on the Reserve List, where developers can apply to trigger sites for sale according to market demand.

A site will only be put up for tender if the developer’s minimum bid price is acceptable to the government.

Savills said there could be about 7,800 units on the Reserve List in the second-half 2013 land sales programme, up from the 7,100 units in the first-half.

Alan Cheong, research head at Savills Singapore, said: “If we cut back on the GLS supply, starting say second half of this year, allowing the construction from some of the earlier projects that were sold in 2011, 2012, you may see a smoothening-out effect of the completed supply in 2015 to 2016 and 2017 and that I think would be healthier for the market, the much vaunted oversupply situation will then be something that is not likely to happen.”

Analysts expect the government to continue to offer sites in growth areas like Sengkang and Punggol, as well as regional centres including Jurong East, Tampines and Woodlands.

Alice Tan, associate director and head of consultancy and research at Knight Frank, said: “In addition, the Circle Line could be an area where the government could want to look at enhancing its utilisation rate, so there could be some site that could be launched in areas along the Circle Line, such as between probably Kent Ridge all the way to Haw Par Villa areas.”

With regards to executive condominiums, some analysts said the government should continue to offer the same number of units in the second half of the year as demand is strong, while others say this number could be reduced as the government re-evaluates the EC scheme.

At a dialogue session held In April, National Development Minister Khaw Boon Wan hinted that the government could re-look subsidies for ECs, which cater to Singaporean households in the “sandwiched class”, earning up to S$12,000 a month.

3,100 EC units were offered on the Confirmed List in the first half of 2013. There were no EC sites on the Reserve List.

For the second half of the year, analysts expect developers to continue to be cautious with their land bids, especially for sites in suburban areas that already have numerous new projects.

Source : Channel NewsAsia – 11 June 2013

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