The government keeps the supply of private housing land on the confirmed list for H1

The government keeps the supply of private housing land on the confirmed list for H1 2025

Approximately 5,030 private housing units, including 980 EC units, can be produced from the 10 sites.

December 6, 2024

CONDOsingapore.com

The government will keep the supply of land for private homes on the confirmed list for the first half of 2025, even though recent private residential property launches saw strong sales.

On Friday, December 6, the Ministry of National Development (MND) announced that it would release land for 5,030 private housing units within the next six months, which is comparable to the 5,050 units of land supply for the confirmed list for H2 2024.

Offerings of plum sites

Market observers anticipate that developers will be very interested in the seven new sites on the most recent confirmed list, the majority of which are in prime locations close to MRT stations.

These include two private housing sites on Dunearn Road and Telok Blangah Road, which will serve as the foundation for the construction of new housing precincts at the site of the former Keppel Golf Course and Bukit Timah Turf City, respectively.

In H1 2025, additional new plum offerings will be introduced, such as a private housing development adjacent to the Lakeside MRT station and close to Jurong Lake.

Partially above the Hougang MRT station in Hougang Central is another desirable piece of land. Approximately 835 private residences and up to 40,000 square metres (sq m) of gross floor area (GFA) of retail space can be produced on the 4.68-hectare commercial and residential site; integrated bus interchange facilities will be part of the development.

In addition to the 5,030-unit private housing supply on the H1 2025 confirmed list, there are 980 executive condominium (EC) units spread across three locations: two existing locations in the Bukit Panjang area, Woodlands Drive 17 and Senja Close, and a new plot on Sembawang Road.

In recent years, there has only been one EC plot on the confirmed list of half-year government land sales (GLS) programmes. About 560 units can be produced by the H2 2024 confirmed list's only EC plot.

ECs are a type of public-private housing hybrid where resale restrictions and initial buyer eligibility are fully removed ten years after the completion of an EC project.

Regardless of demand, confirmed list sites are released for sale on time.

MND will offer land that could potentially produce roughly 3,475 private homes (none of which will be EC units) in H1 2025 on the reserve list, where sites are only put up for sale after a developer successfully applies or when there is enough market interest.

Compared to the H2 2024 reserve list, which offers land that could potentially produce roughly 3,090 private homes (including roughly 730 EC units), this represents an increase.

Approximately 8,505 private residential units (including EC units), 242,900 sq m GFA of commercial space, and 530 hotel rooms are anticipated to be produced overall from the 10 confirmed-list sites and 9 reserve-list sites for the H1 2025 programme, according to MND.

These exceed the 113,650 square metres of commercial space and 8,140 private residences (including EC units) that can be created on the confirmed and reserve lists for H2 2024, but they are equal to the 530 hotel rooms.

2024: A year unlike any other

According to PropNex CEO Ismail Gafoor, 2024 has been a record-breaking year for GLS tenders. "The Urban Redevelopment Authority (URA) had chosen not to award the tender for three plots for the first time."

These include a residential plot in Media Circle designated exclusively for long-term serviced apartments, a master-developer site in Jurong Lake District, and a Marina Gardens Crescent site. Both are white sites for mixed-use development. It was determined that the highest bids for these three plots were excessively low.

A private housing site with a long-term serviced apartment component on Upper Thomson Road (Parcel A) did not attract any bids.

This website has reappeared in the confirmed list for H1 2025. This time, using a serviced apartment or a long-term serviced apartment won't be required, but it might be permitted with technical agencies' consent.

In November 2023, the government unveiled a new rental concept: long-stay serviced apartments, which require a minimum stay of three months. They are not the same as standard serviced apartments, which require a minimum stay of seven days.

Keeping its word

For the Media Circle plot, which will be on the H1 2025 reserve list, the URA is sticking to using it exclusively for long-term serviced apartments. It joins the Marina Gardens Crescent plot and the Jurong Lake District master-developer site, which were previously placed on the reserve list.

Because the majority of the H1 2025 confirmed-list sites are in prime locations, analysts are more optimistic about their prospects.

According to Nicholas Mak, chief research officer at Mogul.sg, "some developers are likely to be willing to pay top dollar for some of the choicest sites." These new locations will probably fetch higher prices than comparable land parcels that have already been sold.

Therefore, the most recent GLS Programme would not lower the price of private homes. It might accelerate price growth and have the opposite effect.

A different perspective was provided by Wong Xian Yang, head of research for Singapore and South-east Asia at Cushman & Wakefield. "Developers are expected to be cautious and selective, even though they may increase their land-acquisition efforts."

In spite of the strong local demand for private residential real estate, he continued, "developers are still worried about increased development risks because of the threat of new cooling measures, higher construction costs, and buyer affordability constraints."

Similarly, Lee Sze Teck, senior director of data analytics at Huttons, stated: "Developers may have more flexibility to modify their land bids due to the lower interest-rate environment. But the strong sales response to recent project launches also increases the likelihood that the government will intervene to stabilise the market.

According to him, developers will therefore probably exercise caution in order to control any possible negative risks.

The EC approach might "backfire."

Additionally, Mak of Mogul.sg pointed out that there might be unforeseen consequences if three EC plots are included in the confirmed list.

By providing the three plots on the confirmed list, the government is obviously attempting to satisfy the demand for EC units and to lower EC land prices, he said.

However, the government's efforts could backfire if the EC resale and ownership restrictions aren't changed to match those of Prime and Plus apartments under the new HDB flat classification, such as the 10-year minimum occupation period and the subsidy recovery upon resale.

Developers would place aggressive bids to purchase the three EC plots, which would raise land prices, Mak continued. "The rising prices of EC units will eventually contribute to higher private property prices, as EC prices form the floor price for private housing."

According to MND, the confirmed list for H1 2025 will help fulfil the population's housing needs over the coming years by adding roughly 57,200 private housing units (including EC) to the pipeline supply.

"To meet the demand for owner-occupation and rental housing, the supply will consist of a good spread of sites across geographical locations for the development of conventional private residential units and long-stay serviced apartments," it continued.