Sharp cut in govt land supply for next year

[reporter2]

http://www.straitstimes.com/archive/...-year-20131219

Sharp cut in govt land supply for next year

Move follows developers' concerns about oversupply in private housing

Published on Dec 19, 2013

By Melissa Tan


FEARS among developers that an oversupply of private housing is building up appear to have prompted the Government to reduce its supply of land sharply.

The amount of development sites it will make available for sale in the first half of next year will be able to yield only about 11,600 homes - the first time the number has fallen below 14,000 since the second half of 2010.

The supply slowdown suggests that the Government is "taking a more cautionary stance" towards the property market, said Jones Lang LaSalle research head Chua Yang Liang.

Colliers International research head Chia Siew Chuin added that the Government will probably continue reducing supply.

The upcoming home supply for the first half of 2014 is 18 per cent lower than the 14,155 units earmarked for the second half of this year, and also significantly lower than the 14,035 units planned for the first half of this year.

The Ministry of National Development's (MND) announcement yesterday comes after the Real Estate Developers' Association of Singapore (Redas) warned last month that state land sales need tweaking given the looming bumper crop of new private homes.

About 65,000 new private homes are expected to be completed over the next three years.

MND said yesterday that next year's supply, coupled with ongoing projects, "is expected to be adequate to meet the demand for private housing and commercial space over the next few years".

The government land sales for the first half of next year consist of eight confirmed sites and 15 on the reserve list. Confirmed-list plots go on sale at a pre-determined date regardless of demand, while land on the reserve list hits the market only when developers lodge minimum acceptable bids.

The eight confirmed sites can yield 4,630 private homes including 2,200 executive condominium (EC) units, and 5,000 sq m of commercial space. They include a parcel at Prince Charles Crescent in Redhill beside Wing Tai project The Crest.

Most of the residential sites on the confirmed list are on the outskirts, in places such as Yishun, Sembawang and Sengkang.

Selling more suburban plots could help calm the mass-market private home sector, said Chesterton Singapore managing director Donald Han, noting that prices for these units have outpaced the overall market this year.

The confirmed list includes a mixed-use site at the junction of Upper Serangoon and Meyappa Chettiar roads that is zoned for residential and commercial use.

There are 13 private residential sites on the reserve list, including one EC plot, a commercial parcel in Sims Avenue and a Marina View white site where multiple uses are allowed. These can yield about 7,000 homes in all, including 600 EC units, and 188,000 sq m of commercial space. The commercial plot and white site will allow development of more commercial space if there is demand over and above the 1.1 million sq m of office space in the pipeline.

MND said it has taken a hotel plot in Race Course Road off the reserve list to "facilitate a review of the land use intention for the site", citing a "healthy pipeline supply" of hotel rooms. The site was put on the list in May 2011.

The Urban Redevelopment Authority told The Straits Times yesterday that the move was not related to the riot in Little India earlier this month.

[email protected]

[Wunderkind]

http://www.straitstimes.com/archive/...-year-20131219

Sharp cut in govt land supply for next year

Move follows developers' concerns about oversupply in private housing

Published on Dec 19, 2013

By Melissa Tan


FEARS among developers that an oversupply of private housing is building up appear to have prompted the Government to reduce its supply of land sharply.

The amount of development sites it will make available for sale in the first half of next year will be able to yield only about 11,600 homes - the first time the number has fallen below 14,000 since the second half of 2010.

The supply slowdown suggests that the Government is "taking a more cautionary stance" towards the property market, said Jones Lang LaSalle research head Chua Yang Liang.

Colliers International research head Chia Siew Chuin added that the Government will probably continue reducing supply.

The upcoming home supply for the first half of 2014 is 18 per cent lower than the 14,155 units earmarked for the second half of this year, and also significantly lower than the 14,035 units planned for the first half of this year.

The Ministry of National Development's (MND) announcement yesterday comes after the Real Estate Developers' Association of Singapore (Redas) warned last month that state land sales need tweaking given the looming bumper crop of new private homes.

About 65,000 new private homes are expected to be completed over the next three years.

MND said yesterday that next year's supply, coupled with ongoing projects, "is expected to be adequate to meet the demand for private housing and commercial space over the next few years".

The government land sales for the first half of next year consist of eight confirmed sites and 15 on the reserve list. Confirmed-list plots go on sale at a pre-determined date regardless of demand, while land on the reserve list hits the market only when developers lodge minimum acceptable bids.

The eight confirmed sites can yield 4,630 private homes including 2,200 executive condominium (EC) units, and 5,000 sq m of commercial space. They include a parcel at Prince Charles Crescent in Redhill beside Wing Tai project The Crest.

Most of the residential sites on the confirmed list are on the outskirts, in places such as Yishun, Sembawang and Sengkang.

Selling more suburban plots could help calm the mass-market private home sector, said Chesterton Singapore managing director Donald Han, noting that prices for these units have outpaced the overall market this year.

The confirmed list includes a mixed-use site at the junction of Upper Serangoon and Meyappa Chettiar roads that is zoned for residential and commercial use.

There are 13 private residential sites on the reserve list, including one EC plot, a commercial parcel in Sims Avenue and a Marina View white site where multiple uses are allowed. These can yield about 7,000 homes in all, including 600 EC units, and 188,000 sq m of commercial space. The commercial plot and white site will allow development of more commercial space if there is demand over and above the 1.1 million sq m of office space in the pipeline.

MND said it has taken a hotel plot in Race Course Road off the reserve list to "facilitate a review of the land use intention for the site", citing a "healthy pipeline supply" of hotel rooms. The site was put on the list in May 2011.

The Urban Redevelopment Authority told The Straits Times yesterday that the move was not related to the riot in Little India earlier this month.

[email protected]

It is a step in the right direction.

Unless the government is planning to open the FW floodgate in 2014, precautionary measures must be put in place now to address the huge supply of housing coming into the market in 2015 onwards.

Land sales must be balanced with the overall supply in the near future.

[reporter2]

http://www.businesstimes.com.sg/arch...upply-20131219

Published December 19, 2013

Govt cuts land sales under weight of supply

For H1 2014, MND will launch through confirmed list eight sites that can generate 4,630 private homes

By Kalpana Rashiwala [email protected]


[SINGAPORE] The 4,630 private homes that can be generated from the confirmed list sites slated for launch by the government in H1 next year is not only down 22.3 per cent from the current H2 2013 slate but is also the lowest half-yearly quantum since H1 2010, when the figure was 2,925 units.

Across the board, the Ministry of National Development (MND) is scaling back the Government Land Sales (GLS) Programme for private housing, commercial and hotel sites for the first six months of 2014 to factor in the large supply pipeline. The move is seen as an attempt to engineer a soft landing.

For H1 2014, MND will be launching through the confirmed list eight sites that can generate a total of 4,630 private homes (including 2,165 executive condominiums) against 5,960 units (including 2,785 ECs) in the current slate. In all, there will be seven pure residential sites on the confirmed list in the first half next year, down from 10 currently.

MND noted the confirmed list supply will be "added to the existing large pipeline supply of about 97,400 private housing units (including ECs)".

Supply on the reserve list will also be trimmed 15.1 per cent to 6,955 units (including 605 ECs) in H1 next year from 8,195 units (inclusive of 535 ECs).

"The government is indirectly acquiescing to the fact that if they continue the previous torrid pace of supply for housing, the market will swing from deficit to glut for completed housing stock come 2017," observed Savills Singapore research head Alan Cheong.

DTZ's head of Singapore research, Lee Lay Keng, noted that transaction volume in the private residential market has fallen significantly since the total debt servicing ratio framework took effect in late-June.

SLP International executive director Nicholas Mak said the four EC sites in the confirmed list outnumber the three private condo sites, which is unprecedented. Tan Tiong Cheng, chairman of Knight Frank, said the "government probably thinks that bids for EC sites have been too aggressive lately". This, along with an expected drop in EC demand arising from the recently introduced 30 per cent mortgage servicing ratio cap for EC buyers, should help to moderate prices, he added.

For commercial space, the combined confirmed and reserve list supply of 193,340 sq metres (2.08 million sq ft) gross floor area (GFA) for H1 2014 reflects a big drop from 268,050 sq m under the current slate. It is also the lowest since H1 2006, when the total supply was at 125,505 sq m.

Savills' Mr Cheong said: "They are holding back supply of new office sites because come 2016-2017, a massive spike in supply from Marina Bay and Tanjong Pagar/Cecil Street is expected."

MND said two reserve-list sites - a white site in Marina View and a commercial land parcel in Sims Avenue - will "provide opportunities for the market to initiate the development of more commercial space, over and above the 1.1 million sq m GFA of office space in the pipeline, if there is demand".

No hotel site will be available via the GLS Programme in the next half-year for the first time since the reserve list system was minted in H2 2001. MND pointed to "a healthy pipeline supply of 12,700 hotel rooms".

Nonetheless, a spokesperson for the Urban Redevelopment Authority (URA) highlighted that developers may choose to develop some hotel rooms for the Sims Avenue commercial site and Marina View white site, after setting aside the minimum quantum of space that has to be developed for other uses (for example, offices). The current slate has three hotel sites, all on the reserve list. Two have been triggered for launch - at Havelock Road and East Coast Road. The third plot, at Race Course Road, will be removed from the reserve list to "facilitate a review of the land use intention" for the site.

Summing up its strategy, the Ministry said: "Supply from the GLS Programme, together with the large supply from projects in the pipeline, is expected to be adequate to meet the demand for private housing and commercial space over the next few years."

In all, seven new sites have been introduced for the next half, five of them through the confirmed list. These comprise two adjacent EC sites in Yishun St 51 near the Orchid Country Club Golf Course with tender closings at the same time under the "batched tender" system, and another pair of adjoining sites for private housing development along Fernvale Road near Jalan Kayu, also with simultaneous tender closing, plus an EC site in Sembawang Avenue.

The two new sites on the reserve list are a private housing site in Margaret Drive and an EC site in Sembawang Road/Canberra Link.

Most of the new sites are not "super hot", as SLP's Mr Mak put it. Industry players have been urging the authorities to head in this direction to put a lid on rising land prices. "If you put up prime sites when developers are hungry for land, you'll see bullish bids," said Chia Siew Chuin, director of research and advisory at Colliers International. She noted that the sites that have been carried over from the H2 2013 GLS Programme are more attractive than the new sites.

While market watchers agreed with the government's strategy of clipping land sales to avoid a glut building up, the soft-launching plan could go awry.

"One scenario is that with fewer sites on offer, if new entrants continue to bid, they may pit themselves against local players who will also need to replenish landbanks to continue their business. This heightened competition could start driving up land bids again, which could portend further hikes in private home prices," suggested Colliers' Ms Chia.

[radha08]

i have full faith that the authorities will steer us in the right direction