Monday, December 31, 2012

14,000 Private Residential Homes to Come for First Half of 2013

The Ministry of National Development (MND) has announced that 12 private residential sites, including 5 Executive Condominium (EC) sites and a mixed commercial and residential site, make up the Confirmed List for first half of 2013 (1H2013) of the Government Land Sales (GLS) programme.

These plots of land will be developed into 14,000 new private homes in the first half of next year. Of the targeted 6900 private residential units, 3100 will be ECs. The aim of releasing this supply is to keep the price of housing steady after it hit the roof in the third quarter of 2012.

Most of these private residential sites will be situated at the city fringe or the suburbs, where home prices are generally lower. The sites will also yield 33,000 sqm gross floor area (GFA) of commercial space.

The expected number of 14,000 homes that will be developed from these sites is similar to the 14,185 and 14,140 units achieved in the first and second half of this year respectively.

On top of the abovementioned sites on the Confirmed List, the MND said that the Government has also put 19 sites on the Reserve List. These sites include 11 private residential sites, one commercial-cum-residential site and two commercial sites. In total, they can provide about 7100 private residential units and over 3 million sq ft of commercial space.

Four hotel sites with a total of about 1740 hotel rooms and one white site are also included in the list. Developers are permitted to choose a combination of uses for white sites as well as the amount of floor space allocated for each use, as long as the overall GFA for the entire development is kept within limits.

A tender will only be considered under the Reserve List system when the Government agrees to the minimum bid price of the developer submitting an application.

Industry insiders have observed that the number of sites on the Confirmed List is lower than that on the Reserve List in this latest GLS exercise. Excluding the 3100 EC units, only 3800 private residential units will be created from the Confirmed List in 2013. This number is 300 lower than what was released in the same period in 2012. The reason for the decrease could be the fact that supply is still rather healthy.

As of the third quarter of this year, 93,800 private residential units, not counting 9800 EC units are under construction. Of this, 40,000 units and 3400 EC units are still unsold.

Nonetheless, developers will be attracted to, and still bid aggressively for sites in the Confirmed List that are in prime locations for landed housing, like at Coronation Road or Victoria Park Road. These plots are situated among mostly low-rise housing and good schools.

Experts predict that until private housing prices movements are steady, the Government will keep monitoring land supply for private residential development.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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