Sharp cut in govt land supply for next year

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 on Wednesday 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 on Wednesday 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 on Wednesday that the move was not related to the riot in Little India earlier this month.

melissat@sph.com.sg

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