Lowest number of private residential units released since 1H2007 GLS programme
By Timothy Tay
/ EdgeProp |
The government has released its list of government land tenders that will launch in the first six months of 2019. The 1H2019 Government Land Sales (GLS) Programme includes five sites on the Confirmed List and nine sites on the Reserve List. When developed, they could yield up to 6,475 private residential units, 1,115 hotel rooms, and 925,695 sq ft of commercial space.
Many property consultants have noted that the number of private residential units that could be developed from the 1H2019 GLS list has been significantly reduced to mitigate a potential oversupply situation developing over the next few years. According to URA, the current pipeline supply of private residential units in the market stands at about 45,000 units, comprising 31,000 unsold units from past GLS and en bloc sale sites that have been granted planning approvals, as well as 14,000 units are from sites pending planning approval. In addition, close to 28,000 existing private residential units remain vacant.
The number of private residential units (including executive condominiums) that could be yield from the Confirmed List has decreased by 25%, from 2,705 units in the 2H2018 GLS programme to 2,025 units in the 1H2019 GLS programme, says Christine Sun, head of research and consultancy at OrangeTee & Tie. Since the recent property cooling measures imposed in July this year, overall transaction volumes of private residential units have declined and developer’s demand for land has moderated. This led the government to moderate the supply of units for the 1H2019 GLS programme, URA says.
The last time such an “obvious cutback” in the number of private residential units that could be developed occurred was in the 1H2007 GLS programme, when 5,475 units were released. At that time, it also coincided with a blitz of collective sales, says Desmond Lim, head of research at CBRE. The 1H2019 GLS programme is also the lowest number of residential units in both the Confirmed and Reserve Lists since the 1H 2007 GLS programme, says Christine Li, head of research at Cushman & Wakefield.
Demand for new private residential units is expected to recover “moderately” next year to 10,000 to 12,000 units, due to a “weaning-off effect” of the cooling measures and anticipated positive economic growth next year,” says Sun. “Developers are also likely to take a more measured approach in future land bidding exercises in light of the on-stream supply and new guidelines to raise the minimum average unit size for non-landed housing developments”, she adds.
Among the Confirmed List, four are zoned for private residential developments and one site at Canberra Link has been allocated for an EC development. Two sites, at Tan Quee Lan Street and Bernam Street, have 21,527 sq ft of complimentary commercial space each. Other sites on the Confirmed List include Clementi Avenue 1 and one-north Gateway. The Reserve List includes two White Sites at Woodlands Avenue 2 and Marina View, a hotel Site at Sims Avenue, six residential sites at Hillview Rise, Dunman Road, Dairy Farm Walk, Canberra Drive, and Bartley Road, as well as an EC site at Fernvale Lane.
Credit: URA
The number of sites allocated for ECs has remained the same as the 2H2018 GLS programme, despite increasing demand for ECs in recent years, says Sun. “The total number of ECs that can be yielded from both The Confirmed and Reserve List sites have shrunk 24.8 per cent from 1,210 units in the second half of 2018 GLS programme to 910 units in the first half of 2019 GLS. The reduced supply may further exacerbate the current price growth of new ECs”, she says.
“The most of the upcoming Confirmed List sites have strong locational attributes and should be attractive to developers. Developers’ participation is expected to be keen but tempered in view of the current uncertain property landscape,” says Li of Cushman & Wakefield.
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