More private homes expected under govt land sales programme

Singapore will make available for sale sufficient land to build about 14,000 private homes in the first half of next year, the government said on Friday.

The Ministry of National Development (MND) said this as it unveiled the Government Land Sales Programme for the first half of 2013 (1H2013).

There will be 12 private residential sites, including five executive condominium (EC) sites, and one site for a mixed commercial and residential development on the Confirmed List.

These sites can yield about 6,900 private residential units, including 3,100 EC units and 33,000 square metre gross floor area (GFA) of commercial space.

MND said most of the private residential sites, including the five EC sites, are located in the suburban areas or in the city fringe where more affordable private housing is expected to be built.

In addition to the sites on the Confirmed List, MND said 19 sites will be available under the 1H2013 Reserve List.

These include 11 private residential sites, one commercial and residential site, two commercial sites, one “white” site and four hotel sites.

Under the Reserve List system, a site will only be put up for tender if the developer’s minimum bid price is acceptable to the government.

“White” sites are those which developers are allowed to decide on a mix of uses for the site and respective quantum of floor space for each use, as long as the total permissible GFA for the whole development is not exceeded.

Sites on the Reserve List can yield about 7,100 private residential units, 281,000 square metre GFA of commercial space and 1,740 hotel rooms.

The total pipeline supply of 14,035 units under the Government Land Sales Programme for the first half of 2013 is almost similar to the number of units made available for the first half (14,185) and second half (14,140) of this year.

Ku Swee Yong, CEO of International Property Advisor, said: “The planners have actually put more sites on the Reserve List this round and put less on the Confirmed List.

“So on the Confirmed List, with just under 7,000 units of residential, I think the authorities are aware there is actually a lot of supply – almost 100,000 units of residential that have been launched or are in the process of construction.”

Excluding ECs, only 3,800 new private residential units will be generated from the Confirmed List – 300 units fewer compared to the same period this year.

MND said that as at the third quarter of 2012, about 93,800 private housing units – including about 9,800 EC units – will be constructed over the next few years, of which about 40,000 units – including about 3,400 EC units – are still unsold.

However, analysts have said some developers may submit aggressive bids for some sites in the Confirmed List in prime locations.

For example, a plot of land at Mount Sophia – the former site of the old Methodist Girls’ School – is expected to be hotly contested and could fetch about S$400 million.

Meanwhile, a site in Yishun near Northpoint Shopping Centre could even see bids topping S$1 billion.

Property consultant SLP International believes the Yishun site is similar to that of Bedok Residences and could draw major developers like CapitaLand and Frasers Centrepoint. Frasers Centrepoint owns Northpoint Shopping Centre.

Analysts said major developers are able to put in high bids, given their strong balance sheets.

Alan Cheong, director of research and consultancy at Savills, said: “Land values tend to augment each other and when you set a pricing in this locality, your neighbourhood tends to move as well in log steps.

“So land values then flow towards the edge of the island and rebound back. So it creates that amplification effect.”

Source : Channel NewsAsia – 14 Dec 2012

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