June 29, 2007

Land-use intensity: No sudden changes

Mah dismisses talk of increase in plot ratios; there's enough land for next 10-15 years

By Lydia Lim, Senior Political Correspondent

THE Government has no plans for a major exercise to raise plot ratios anytime soon.

In the lead-up to next year's announcement of the Master Plan for Singapore's physical development, National Development Minister Mah Bow Tan quashed expectations in some quarters that plot ratios are headed upwards, to make room for a future population of 6.5 million.

The plot ratio of a site decides how much total floor area it can support, in other words, whether its buildings can be high-rise or low-rise. It is also known as a site's development intensity.

In an interview this week, Mr Mah said there was no need for a massive across-the-board change in development intensity, as the land available today is more than enough to meet needs over the next 10 to 15 years.

That is the time-frame for the upcoming Master Plan 2008, to be unveiled around the middle of next year.

The statutory document regulates the permissible use and density for land parcels across the island. It is reviewed every five years.

Putting into context the 6.5 million figure, Mr Mah said it was the 'upper bound' for Singapore's population over the long term of 40 to 50 years.

The figure is calculated based on current demographic trends.

It would have little impact on shorter-term, land-use plans.

'There is more than sufficient land for accommodating our population quite comfortably in the next 10, 15 years, which is the time-frame for this Master Plan.

'There does not appear to be any need for a massive across-the-board kind of intensification...some of the land that we have is not built up to full intensity under today's intensity,' he said.

Mr Mah added that his ministry's strategy of intensifying land use gradually had worked well.

Coming in the midst of collective property sale frenzy, Mr Mah's announcement is likely to have the strongest impact on the sentiments of these sellers.

Dr Ong Seow Eng, deputy head of research at the National University of Singapore's department of real estate, said homeowners who have committed to sell their properties will have fewer reasons to be unhappy, while those planning to sell will have less incentive to hold out for higher prices, in anticipation of higher plot ratios.

He said the Government's strategy of gradual intensification made sense as a sudden change could put undue stress on road and MRT networks.

Mr Lui Seng Fatt, regional director at Jones Lang LaSalle, a global real estate consultant, agreed that the minister's statement would result in more 'realistic' expectations among property owners.

The director of research at property firm Knight Frank, Mr Nicholas Mak, said the Government might have wanted to avoid another round of collective sales as that would again reduce the stock of rental units and cause rents to rise further.

During the interview, Mr Mah also debunked some analysts' reports of a short-term shortfall in private homes.

Some 42,200 new private homes are slated for completion from the second half of this year to 2010, he said, as compared with a historical demand of between 8,000 and 10,000 units a year.

To help buyers and sellers in their decision-making amid a very buoyant property market, he said the Urban Redevelopment Authority would release more information on supply, demand and transaction prices.

'There's nothing like total transparency to help people make clear decisions, rather than to make decisions based on panic or try to influence the market on the basis of selective information,' he said.

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