SINGAPORE: Despite a "healthy supply" of private housing in the pipeline, the Singapore Government said on Wednesday (Jun 27) it will not cut its supply of land for homes in the second half of this year.
About 20,000 private homes are expected to be built from Government Land Sales (GLS) and en-bloc sites that are pending planning approval, and there are another 24,000 unsold units from projects that have received planning approval.
Additionally, more than 30,000 existing private homes are still vacant, the Ministry of National Development (MND) said in a press release.
But the supply of land for private housing under the second half of the GLS programme will be kept at about the same level as that of the first half, as there continues to be strong demand for land from developers, the ministry said.
Transaction volumes are also rising, it added.
Six land sites and another nine reserve sites will be released as part of the GLS programme in the second half of this year. These 15 sites can yield up to 8,040 private homes and 124,200 sq m of commercial space.
"Taken together, the total supply in the pipeline will be able to meet home buyers’ demand over the next one to two years, and to meet our population’s housing needs," MND said.
RESIDENTIAL SITES AT TAMPINES, SIMS DRIVE ON CONFIRMED LIST
The six sites on the Confirmed List comprise four private residential sites including an Executive Condominium (EC), one "white" or mixed-use site and a hotel site.
They can yield 2,705 private homes, including 695 EC units, 42,200 sq m of commercial space and 390 hotel rooms in total.
The Reserve List comprises seven private residential sites (including one EC site) and two mixed-use sites. The seven sites can yield 5,335 private homes (including 515 EC units) and 82,000 sq m of commercial space and 540 hotel rooms.
The confirmed sites are in areas like Tampines Avenue 10, Kampong Java Road, Sims Drive and Middle Road, while the reserve sites are in areas such as Clementi Avenue 1, Dairy Farm Walk, Tan Quee Lan Street and Yishun Avenue 9.
A mixed-use site in Pasir Ris Central will also be released. Other mixed-use sites on the Reserve List are in Marina View and Woodlands Square/Woodlands Avenue 2.
"Sites for office development remained absent in the confirmed list in spite of the continued strengthening of CBD office rents," said real estate firm JLL, adding that the government is hoping for demand to spill into the suburbs to bring jobs closer to homes.
The Woodlands mixed-use site will "help to sustain the development momentum of Woodlands Regional Centre as a major commercial node outside the city", said MND. This is in line with the authorities' objective of decentralising employment centres to bring job opportunities closer to home, it added.
It also noted that the Singapore Tourism Board is optimistic about the country's tourism prospects, with a 6.2 per cent growth in international visitor arrivals last year. The Club Street and Marina View sites are expected to help provide additional hotel rooms to meet the demand.
ANALYSTS HAIL HOTEL SITE PROVISION
Touching on this point, Mr Govinda Singh, Colliers International's executive director of valuation and advisory, Asia, said the Club Street and Marine View site offerings are aligned with his company's view "that there is a shortage of hotel rooms in Singapore".
"We believe the policymakers have been pragmatic in their approach towards the sale of hotel sites via GLS, holding off new site launches for a decade to allow the relatively large number of rooms in the market to be absorbed," he said.
"Now that concerns of an oversupply in hotel rooms have largely receded, the Government has stepped forth to provide land options for the hotel sector."
In addition, Ms Tricia Song, Head of Research for Singapore, Colliers International, noted that the Club Street site was the first hotel site to feature on the GLS Confirmed List since the second half of the 2008 land sales programme.
The last time hotels were included on the Reserve List was in the second half of the 2013 land sales programme, according to Colliers research.
FEWER RESIDENTIAL SITES
Ms Song also noted the lack of new EC sites in the latest announcement, with the only EC plot to feature on the Confirmed List being brought over from the Reserve List of the first half of the 2018 land sales programme.
"Given the robust demand for Executive Condos, there was perhaps an expectation that the Government would place more EC sites in GLS H2 2018, possibly under the Reserve List," she said. "However, this was not to be."
JLL also noted that the three private residential sites and one white site in the Confirmed List will supply 2,010 residential units, a 14 per cent decline from the 1H2018 Confirmed List.
"Although the three GLS sites could help to meet demand from developers, it is uncertain as to whether they will mitigate optimistic land prices," it said.
"They are also unlikely to dilute demand for collective sale sites, especially those in the prime districts for which there is keen interest."