SINGAPORE: The Government has reduced the supply of private residential units on the confirmed list of its land sales programme for the second half of this year, due to the economic impact from the COVID-19 pandemic.
Three private residential sites - including one executive condominium site - have been added to the confirmed list of the Government Land Sales (GLS) Programme for the second half of 2020, said the Ministry of National Development (MND) in a news release on Wednesday (Jun 24).
Together, the three sites can yield about 1,370 units, including 615 executive condominium units.
The total number of homes that can be developed, however, is nearly 23 per cent less than the 1,775 units under the confimed list in the GLS programme for the first half of the year.
The supply was “calibrated to take into account the global COVID-19 situation”, said MND.
“Given the economic contraction and uncertain business outlook, the Government has decided to reduce the supply of private residential units on the confirmed list,” it said.
It also noted that there has been a “progressive decline” in the unsold inventory of private housing units, with the total falling by a cumulative 20 per cent between the first quarter of 2019 and the first quarter of this year.
As such, said MND, the government decided to provide a "moderate supply" via the confirmed list.
“Together with the supply of units already in the pipeline, this will cater to the housing needs of the population when completed in about four or five years’ time,” said MND.
The sites will be launched in the last quarter of this year and have a longer tender period of six months to allow developers more time to make their assessment in view of the ongoing COVID-19 situation.
MEASURED SUPPLY "NOT SURPRISING": ANALYST
CBRE’s head of research for Southeast Asia Desmond Sim noted that the housing supply proposed for the confirmed list for the second half of this year is the lowest since the first half of 2016, when 1,560 units were offered.
The "measured supply", however, is “not surprising” given the COVID-19 situation, said Mr Sim.
“This is a degustation menu as the confirmed list presents palatable sites with smaller units but with greater variety in terms of location,” he said.
“Should any developers’ appetite for land be unsatiated, they can still order from the reserve list.”
Like many industries, Singapore's property sector has taken a hit from the COVID-19 pandemic.
Singapore implemented a circuit breaker period on Apr 7 to contain the spread of COVID-19, allowing only essential services such as healthcare, transport, logistics and food and beverage to continue operations.
During that period, showroom viewings - a core marketing activity for property development - were halted and potential buyers had to view the units virtually.
Showroom viewings were only allowed to resume on Jun 19 after Singapore entered into Phase 2 of its post-circuit breaker reopening, albeit with capacity limitations.
READ: Property firms expect more transactions as physical viewings of resale flats, showrooms resume in Phase 2 reopening
Property analyst Ong Kah Seng said that the reduction in housing supply will help developers focus on selling properties from existing projects and ensure that they overcome construction issues and meet completion deadlines.
"Many developers have to dedicate their efforts in this critical period to sort out their construction issues and ensure timely delivery of their existing projects - instead of planning too further ahead for business opportunities through purchasing new sites," said Mr Ong.
He added that two private residential sites on the confirmed list, located in in Ang Mo Kio Avenue 1 and Northumberland Road, are “right-sized” for developers amid the COVID-19 pandemic.
The Ang Mo Kio site is estimated to yield 370 units while the plot at Northumberland Road may house 385 units.
The third site on the confirmed list is for an executive condominium at Tengah Garden Walk. It is expected to yield 615 units.
“Moderate-size projects have digestible development costs (including construction costs) for developers and the new project will have sufficient residential volume to result in resident and project vibrancy - and will be even more attractive for developers to focus on amid this crisis,” he said.
On Wednesday, MND also said that there will be nine sites on the reserve list. They comprise five private residential sites (including one EC site), three White sites and one hotel site.
All but one of the housing site were carried over from the GLS programme for the first half of the year.
Together, the sites on the reserve list can yield about 5,300 units, including 590 EC homes, 100,000 sq m gross floor area of commercial space and 1,070 hotel rooms.
A site on the reserve list will only be triggered for sale if a developer's indicated minimum price in his application is acceptable to the government.