Geylang Living News - Government increases supply of private homes for the whole of 2023

The government has pulled its second lever in months to aid its search for a sustainable property market. It announced on Wednesday (June 21) the sixth straight increase in the supply of private homes on the semi-annual Government Land Sale (GLS) confirmed listing. This brings the total supply of confirmed private housing units on the list – including executive apartment (EC) units – for 2023 to the highest level in a decade, at 9,250.

The Ministry of National Development (MND) is increasing the supply of private homes on confirmed listings to about 5,160 units – including 560 executive condominiums (ECs) – in the second half of this year. This is 26.2% higher than the current supply of 4,090 private homes, including 700 ECs, in the current GLS first half of 2023.

Geylang Living News - Government increases supply of private homes for the whole of 2023

BQP also noted that the full-year supply for 2023 is nearly 50% higher than the 2022 supply and about 2.5 times the 2021 supply.

Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield, said: “The sharp increase in housing supply is in response to market demand and stable private housing prices. despite a weaker economic outlook and successive waves of recession. cooling measures.”

Alan Cheong, Managing Director of Research and Consulting at Savills Singapore, said: “The supply of 5,160 private homes from the H2 confirmed listing is huge. It could make developers more cautious when bidding for land. This will help manage land costs.

“On top of that, cooling measures and their frequent recalibration have the potential to reduce the overwhelming demand for private homes. Together, we can see a moderate increase in prices and rents.”

Sites on the confirmed list will be launched for sale as scheduled, regardless of demand. MND is also offering a total commercial floor space of 4,900 square meters (m2) through the GLS H2 2023 program confirmed listing. This is down from 106,400 m2 for the first half of 2023, boosted by a boost. by the Jurong Lake District location.

Meanwhile, in the reserve list, MND will release land for 3,430 private homes, including 855 EC, in the second half of 2023. This is 5.4% lower than the supply of 3,625 private homes. , including 855 EC units, in the second half of 2023. EC is a mixed-use public-private housing mix.

Reserved sites are only launched when the application is successful by the developer or when there is sufficient market interest. The supply of commercial space on the reserve list for H2 2023 is 93,350 m2 – unchanged from H1 2023. The supply of 530 hotel rooms in the reserve list is also unchanged. There is no hotel room supply on the confirmed list for the second half of 2023 and the second half of 2023.

“The government will continue to monitor economic and property market conditions and calibrate future delivery of GLS programs, as needed, to help meet demand and promote growth,” said MND. promote market stability”.

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In total, the H2 2023 GLS program has eight locations on the confirmed list and nine locations on the reserve list. The four sites on each listing are new. Among the four new sites on the list that have been confirmed is a parcel of land next to the Orchard Boulevard metro station, which could house around 270 private homes. Also on the list are two locations along Upper Thomson Road near the Springleaf metro station, which could provide a total of 1,535 private housing units. The fourth new site, along Zion Road near Great World City, could house about 955 homes.

An adjacent plot on Zion Road, which can house 605 private homes, is among four new sites on the latest reserve list. Another new prime location on the reserve list is a plot of land on Holland Drive that could house some 680 homes; it is located near One Holland Village and Jalan Mambong project.

MND has also stocked a private housing estate at De Souza Avenue on Old Jurong Road/Jalan Jurong Kechil locality, which can generate 350 apartments; as well an EC plot at Tampines Street 95 can yield 560 units.

Desmond Sim, chief executive officer of Edmund Tie, said: “The latest GLS program provides an opportunity for developers to purchase residential development land in all segments. The Orchard Avenue site will provide another litmus test of the impact of doubling the Additional Buyers Tariff (ABSD) rate on foreign buyers to 60%.

“Traditionally, projects in the Central Core Region (CCR) – and even some projects in the Rest of the Central Region (RCR) – tend to have a higher proportion of foreign buyers than other areas."

Tricia Song, head of Southeast Asia research at CBRE, notes that prime locations account for half of the eight new land lots on the reserve and confirmed listings.

Knight Frank Singapore’s research head, Leonard Tay, observed that with the start of operations of new MRT lines in recent years, the government is also starting to populate residential catchments near some of the MRT stations on those lines. These include the Orchard Boulevard, Zion Road and Upper Thomson Road plots, which are close to stations on the Thomson-East Coast Line.

Tay also noted that the risks of private residential development have increased substantially. This comes on the back of the latest cooling measures, in addition to the clouded business sentiment and prevailing economic uncertainty.

“It remains to be seen whether developers will have the same appetite for the newly introduced GLS sites, even though demand for new private homes in the mass market and city fringe remains intact,” he added. Wong of Cushman & Wakefield said the ramp-up in supply from the GLS confirmed list would compete with the private-sector en bloc sale market.

“Assuming sites with similar attributes, developers prefer to acquire from the GLS programme as it is more straightforward. However, seven out of eight sites in the H2 2023 confirmed list are mid- to large-sized sites generating over 500 units each; these may be out of reach for smaller developers. As a result, developers looking for smaller projects would still look towards the en bloc market to buy land,” he said.

Elaborating on the H2 2023 GLS programme, MND said: “Complementing the property market cooling measures, this supply injection will bring the total pipeline supply of private housing (including ECs) to about 63,500 units, and cater to resilient demand.”

That figure comprises 50,200 units that have received planning approval, and 13,300 units from GLS sites and awarded private-sector en bloc sale sites that have yet to be granted planning approval. Out of the total pipeline supply, about 40,400 units will be completed between 2023 and 2025, which is more than double the 20,000 units that were completed from 2020 to 2022.

“This forms part of the total supply of about 100,000 public and private housing units to be completed between 2023 and 2025, which will help to cater to housing needs in the immediate few years ahead,” MND said.

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