Govt ups land supply

Supply enough, so no need to rush to buy property, says Minister Mah

SINGAPORE – In a move that’s set to spell relief for those worried about rising private property prices, the Ministry of National Development (MND) has increased the supply of land under the Government Land Sales (GLS) programme in the second half of the year.

Developers and homebuyers can look forward to 31 residential sites, which can yield a total of 13,905 units – the highest number since the Confirmed/Reserve List system was introduced in 2001. About 18 sites that can house 8,135 residential units are on the Confirmed List, while 13 sites which can generate 5,770 residential units, are on the Reserve List.

Announcing this on Friday, National Development Minister Mah Bow Tan said the significant increase is in response to market demand and to assure homebuyers that there is enough supply and that “there is no need to rush” to buy properties in anticipation of higher prices.

“This will probably dampen some of the exuberance in the market,” Mr Mah said.

Overall, there are 45 sites in the GLS programme, comprising 27 residential sites, three commercial sites, three commercial and residential sites, two white sites and 10 hotels.

Of the 27 residential sites and four mixed-use sites, five were earmarked for executive condominium development. Most of them are located in suburban areas or in the city fringes.

Head of research and consultancy at Chesterton Suntec International Colin Tan believes that “this is to address the very real concerns of HDB residents who have aspirations of upgrading over the next few years and who have seen prices rising very quickly beyond their affordability over the past one to two years.”

Prices have risen about 25 per cent since the middle of last year, said Mr Donald Han, managing director (Singapore) at real estate consultancy Cushman and Wakefield.

“The purpose of offering more sales of sites in the second half is really to tone down and curb any increase in land prices, because it has repercussion on end prices as well,” he said.

In the first half of the GLS programme, the most popular site attracted up to 18 bids, with tender prices of over $150 million.

While six sites from the previous Confirmed List and four from the previous Reserve List will be carried over into the second half, the Government is removing the Ophir Road/Rochor Road from the list as it reviews the development plan for the site.

It is also making available some 399,830 square metres of commercial space and 3,750 hotel rooms in the second half of the year.

Three new white sites, which can be for commercial and residential use, have been included: Choon Guan Street/Peck Seah Street, Paya Lebar Road/Eunos Road 8 and Boon Lay Way.

Mr Mah said the Government is also keeping tabs on the European debt crisis, which may pose some short-term correction.

And he added that there will be ample time to adjust if demand slows down significantly in the second half.

Dr Chua Yang Liang, head of Research, South-east Asia at property consultancy Jones Lang LaSalle, believes that overall sentiment remains positive and low financing cost will also support buying demand.