Eyes on demand as govt keeps land supply in check

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December 4, 2008, 1.04 pm (Singapore time)

No new sites for MND's H1 2009 Govt Land Sales Programme

By KALPANA RASHIWALA


SINGAPORE - Ministry of National Development (MND) has decided not to add any new sites to the Government Land Sales (GLS) Programme for first half 2009.

The H1 2009 slate - comprising entirely reserve list sites, as previously announced - will have a total of 38 sites. These comprise 37 plots that are being carried over from the H2 2008 reserve list slate and the unsold executive condo site at Punggol Road/Punggol Field which had been tendered under the confirmed list of H2 2008.

The sites that will be available in the H1 2009 GLS Programme can potentially yield some 7,920 private homes, 512,000 sq metres gross floor area (GFA) of commercial space and 5,160 hotel rooms.

'The Government will not add any new sites to the GLS Programme for H1 2009,' MND said.

In formulating its policy, the Ministry took into account the current economic uncertainties and noted that the global economic outlook is likely to remain weak in 2009 and this would have an impact on Singapore's economy, including the property market.

Giving an update on land supply outside the GLS Progamme, MND said there will be a reduced supply of commercial space and no new supply of private residential units from Government agencies. The H1 2009 supply from this source will comprise about 40,000 sq metres GFA of commercial space and 240 hotel rooms.

This is smaller than the land supply for 20 private residential units, 143,000 sq m of commercial space and 240 hotel rooms outside the GLS Programme for H2 2008.

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Dec 4, 2008

No new site for land sales

By Joyce Teo, Property Reporter


THE Government is not adding any new sites to its land sales programme for the first half of next year, given the continuing weak global economic outlook.

It is also offering less commercial space. And there will not be any new supply of private home units from Government agencies, outside of the land sales programme.

'The global economic outlook is likely to remain weak in 2009 and this would have an impact on Singapore's economy, including the property market,' said the Ministry of National Development in a statement on Thursday.

This means that there will only be 'reserve list' sites available for sale in the first half of 2009. Such sites will only be put up for tender if a developer indicates interest in it by submitting a minimum bid that the Government finds acceptable.

A total of 38 sites are available on the reserve list, of which 37 are carried over from the reserve list for the second half of this year, and one is the unsold executive condominium site in Punggol. The unsold EC site was from the confirmed list, which meant that it was for outright sale but there was no demand.

At the start of last month, the Government already announced that it will be suspending outright land sales in the first half of next year. It was to stave off the risk of oversupply given the weak property market outlook.

Developers, who prefer the reserve list system as it allows them to adjust supply to meet demand, had cheered the move.

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Published December 5, 2008

Eyes on demand as govt keeps land supply in check

Analysts hope for measures to boost buying, such as stamp duty rebates

By KALPANA RASHIWALA


(SINGAPORE) The government yesterday kept the lid on the supply of state land for development. All eyes in the market now are on what measures the state will come up with to stimulate property demand.

The Ministry of National Development (MND) has decided not to add any new sites to the Government Land Sales (GLS) Programme for first-half 2009.

The slate for the first six months of next year - comprising entirely reserve list sites, as previously announced - consists of a total 38 sites. These comprise 37 plots that are being carried over from the H2 2008 reserve list and the unsold executive condo site in Punggol that had been tendered out under the confirmed list of H2 2008.

These 38 land parcels can potentially yield about 7,920 private homes, 512,000 sq metres gross floor area (GFA) of commercial space and 5,160 hotel rooms.

In formulating its policy, the ministry took into account the current economic uncertainties and noted that the global economic outlook is likely to remain weak in 2009 and this would have an impact on Singapore's economy, including the property market.

Giving an update on land supply in January-June 2009 from government agencies, outside the GLS Programme, MND said there will be no new supply of private homes and a reduced supply of commercial space (this will only entail projects meant to achieve strategic economic or development goals).

The H1 2009 supply from this source will comprise about 40,000 sq metres GFA of commercial space and 240 hotel rooms - smaller than the land supply for 20 private homes, 143,000 sq m of commercial space and 240 hotel rooms outside the GLS Programme for H2 2008.

Welcoming the latest announcement from MND, a spokesman for the Real Estate Developers Association of Singapore said: 'This further confirms to the market the authorities are mindful of market conditions at the moment and (we) do not need to add further uncertainties.'

Knight Frank director Nicholas Mak says yesterday's announcement gives the market an opportunity to adjust to a new supply-demand equilibrium.

DTZ executive director Ong Choon Fah notes that most of the residential sites in the reserve list are in locations suitable for private housing developments catering to HDB upgraders. 'If developers' sales in these segments pick up, they have the choice of applying for such sites to be released from the reserve list for tender.'

Agreeing, CB Richard Ellis executive director Li Hiaw Ho said: 'As home prices are expected to decline further in 2009, developers may be able to pick up the better-located sites in the reserve list - such as the ones at Bishan Street 14 and Dakota Crescent - at attractive prices. It is likely that most residential activity will be focused on the lower-end of the market, where prices will be more affordable.'

However, analysts are more keen on some demand-side announcements from government.

JP Morgan analyst Chris Gee said: 'It's less of a supply side situation right now. The issue is what can be done to help stimulate demand. All eyes are turning to the Budget statement in January.' He reckons temporary exemptions on stamp duty and property taxes could be possible measures.

Credo Real Estate managing director Karamjit Singh too argues that 'the issues at hand relate to investment sentiments and fear of further downward slide in prices, which is why (home) buyers have been holding back and prices have declined'.

'It would help immensely if buyers could be incentivised to purchase, through measures such as a temporary suspension of stamp duty and the reintroduction of the deferred payment scheme, for example,' Mr Singh added.

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December 5, 2008 Friday

Government offers fewer land sales sites

The move will help ease fears of a supply glut next year

By Joyce Teo, Property Correspondent


NO NEW sites have been added to the Government's land sales programme for the first half of next year, an anticipated move designed to tame fears of a supply glut in an already weak market.

Only sites on the reserve list will be up for sale, and almost all of these are carried over from this year. The amount of commercial space will also be reduced.

'The global economic outlook is likely to remain weak in 2009 and this would have an impact on Singapore's economy, including the property market,' said the Ministry of National Development, which releases the sales programme in June and December every year.

Knight Frank's director of research and consultancy, Mr Nicholas Mak, said the programme announced yesterday reflects government efforts to give the market a chance to adjust to a new supply and demand equilibrium and to lessen the pressure of a glut.

Much of the announcement was flagged in a special statement made on Oct 31, when the Government said it will suspend outright land sales in the first half of next year, leaving only reserve list sites for sale.

It went further yesterday by limiting office space and ruling that no new plots of land will be made available as response to recent tenders was poor, said Mr Mak.

Also, no new supply of private residential units from other government agencies will be made available. It placed about 20 such units on the market in the second half of this year.

Developers prefer reserve list sites as the land goes up for tender only if a minimum bid acceptable to the Government is submitted.

There will be 38 such sites on offer next year, with 37 carried over from the reserve list for the second half of this year. The remaining one is the unsold executive condominium site in Punggol.

That site was from the confirmed list, which meant that it was for outright sale, but there was no demand when it went to market last month.

There are 18 residential sites, 10 for hotels, six commercial plots, three white sites and a commercial/residential site.

The property market has been hit by weak buying interest and a credit crunch. Private home sales are at a standstill as buyers await more price falls.

Developers have also been withholding launches, adding to the stockpile of potential houses, said Mr Mak, who expects 'very few' residential sites to attract buying interest next year.

However, Credo Real Estate managing director Karamjit Singh said supply is not much of a problem as there are still buyers around.

'The problem is buyers' lack of confidence. If the current low sales volume carries into the next year, there is the fear of a deep plunge in prices. The Government should do something soon to stimulate demand,' said Mr Singh.

The Government statement yesterday said that its reserve list system provides 'greater flexibility to the market' to adjust to the economic conditions.

As housing prices are expected to fall further next year, developers may be able to pick up the better-located sites - in Bishan Street 14 and Dakota Crescent - at attractive prices, said CBRE Research executive director Li Hiaw Ho.

'It is likely that most residential activity will be focused on the lower end of the market where prices will be more affordable,' he said, adding that likely launches in the first half of next year include leasehold condos in Boon Lay Way, Elias Road, Simei Street 4 and West Coast Crescent.

The supply of commercial space for the first half of next year has been cut from 143,000 sq m to 40,000 sq m. Transitional office sites have been reduced.

The new land sales programme also offers slightly fewer hotel rooms.

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