The government keeps the availability of land for private housing on the H1 2025 conf

The government keeps the availability of land for private housing on the H1 2025 confirmed list

Approximately 5,030 private housing units, including 980 EC units, can be produced at the 10 sites.

December 6, 2024

CONDOsingapore.com

The government will maintain the land supply for private residences on the confirmed list for the first half of 2025, despite the robust sales at recent private residential property launches.

The Ministry of National Development (MND) announced on Friday (Dec 6) that it will allocate land for 5,030 private housing units within the next six months. This amount is comparable to the 5,050 units of land that were affirmed for the H2 2024 list.

Plum offerings

The most recent confirmed list, which comprises seven new sites, is anticipated to generate substantial interest from developers, according to market observers. The majority of these sites are situated in close proximity to MRT stations.

Two private housing sites in Dunearn Road and Telok Blangah Road are among them. These sites will serve as the foundation for the development of new housing precincts at Bukit Timah Turf City and the former Keppel Golf Course site, respectively.

A private housing site located adjacent to Lakeside MRT station and a stone's throw from Jurong Lake are among the additional fresh plum offerings that will be introduced in H1 2025.

Another desirable land parcel is located in Hougang Central, partially above the Hougang MRT station. The 4.68-hectare commercial and residential site has the potential to produce approximately 835 private residences and up to 40,000 square metres (sq m) of gross floor area (GFA) of retail space. The development will include integrated transit interchange facilities.

The H1 2025 confirmed inventory of private housing units comprises 5,030-units, as well as 980 executive condominium (EC) units on three sites: a new plot in Sembawang Road and two extant sites in Woodlands Drive 17 and Senja Close in the Bukit Panjang area.

In contrast, the confirmed inventory of half-year government land sales (GLS) programmes in recent years contains only one EC property. The solitary EC allotment for the H2 2024 confirmed list has the potential to produce approximately 560 units.

ECs are a hybrid of public and private housing, with resale restrictions and initial buyer eligibility that are entirely abolished 10 years after the completion of an EC project.

Regardless of demand, confirmed list sites are released for sale in accordance with the established schedule.

MND will offer land that has the potential to generate approximately 3,475 private residences (none of which will be EC units) in H1 2025 on the reserve list, where sites are only made available for sale upon successful application by a developer or when there is sufficient market interest.

This represents an increase in comparison to the H2 2024 reserve list, which provides land that has the potential to produce approximately 3,090 private residences, including approximately 730 EC units.

MND anticipates that the 10 confirmed-list sites and nine reserve-list sites for the H1 2025 programme will generate approximately 8,505 private residential units (including EC units), 242,900 sq m GFA of commercial space, and 530 hotel rooms.

These are greater than the 8,140 private residences (including EC units) and 113,650 sq m of commercial space that can be generated on the confirmed and reserve lists for H2 2024, but they are equivalent to the 530 hotel rooms.

2024: A year that is unparalleled

Ismail Gafoor, the CEO of PropNex, observed that 2024 has been an unprecedented year for GLS tenders. "The Urban Redevelopment Authority (URA) had elected not to award the tender for three plots for the first time."

These include a residential tract in Media Circle that is exclusively dedicated to long-stay serviced residences, a master-developer site in Jurong Lake District (both of which are white sites for mixed-use development), and a site in Marina Gardens Crescent. The highest offers for these three sites were determined to be excessively low.

In contrast, a private housing site in Upper Thomson Road (Parcel A), which incorporates a long-stay serviced apartment component, did not receive any proposals.

This site has reemerged in the H1 2025 validated list. This time, the use of serviced apartments or long-stay serviced apartments will not be mandatory; however, it may be permitted with the approval of technical agencies.

The government introduced a new rental concept in November 2023: long-stay serviced residences, which require a minimum stay of three months. They are distinct from traditional serviced apartments, which require a minimum stay of seven days.

Remaining steadfast

Nevertheless, the URA is determining that the Media Circle plot will be exclusively utilised as a long-term serviced apartment. This property will be included in the H1 2025 reserve list. It is joined by the Jurong Lake District master-developer site and Marina Gardens Crescent property, which were previously relocated to the reserve list.

Given that the majority of the H1 2025 confirmed-list sites are situated in desirable areas, analysts are more optimistic about their prospects.

According to Nicholas Mak, the chief research officer of Mogul.sg, certain developers are likely to be prepared to pay a premium for some of the most desirable sites. "It is probable that the prices of these new sites will be higher than those of comparable land parcels that have been previously transacted."

"As a consequence, the most recent GLS Programme would not serve to reduce the value of private homes." It has the potential to have the opposite effect and expedite the growth of prices.

Wong Xian Yang, the director of research for Singapore and South-east Asia at Cushman & Wakefield, provided an alternative perspective. Developers are anticipated to exercise caution and selectivity in their land-acquisition endeavours, despite the potential for an increase in their efforts.

He further stated, "Developers continue to harbour concerns regarding elevated development risks as a result of the spectre of new cooling measures, increased construction costs, and affordability constraints among buyers, despite the resilient underlying local demand for private residential properties."

Lee Sze Teck, senior director of data analytics at Huttons, expressed a similar sentiment: "The lower interest-rate environment may provide developers with additional flexibility to adjust their bids for land." Nevertheless, the likelihood of the government intervening to stabilise the market is also increased by the robust sales take-up of recent project launches.

Consequently, developers are expected to exercise caution in order to mitigate any potential negative consequences, he concluded.

It is possible that the EC strategy will be counterproductive.

Mak of Mogul.sg also observed that the presence of three EC plots on the confirmed list may result in unintended consequences.

"It is evident that the government is endeavouring to address the demand for EC units and to reduce the price of EC land by offering the three plots on the confirmed list," he stated.

"However, the government's endeavours may be counterproductive if the EC resale and ownership restrictions are not adjusted to align with those of Prime and Plus flats under the new HDB flat classification, including the 10-year minimum occupation period and the subsidy recovery upon resale."

Mak also stated that the tenders for the three EC sites would increase land prices as developers competed to acquire them. "The increasing prices of EC units will eventually contribute to increases in the prices of private property, as EC prices serve as the floor price for private housing."

According to MND, the confirmed list for H1 2025 will contribute to a total pipeline supply of approximately 57,200 private housing units (including EC) units, which is sufficient to satisfy the population's housing requirements in the coming years.

"The supply will be a well-diversified mix of sites in various geographical locations, designed to meet the demand for conventional private residential units and long-stay serviced apartments, as well as to accommodate owner-occupation and rental housing," it continued.