Time to finish project on state land shortened
http://www.businesstimes.com.sg/sub/...98187,00.html?
Published August 5, 2010
Time to finish project on state land shortened
Project completion period cut to 5 years to make supply keep up with demand
By EMILYN YAP
THE government is cutting the amount of time that developers have to build private residential projects on state land by a year, to ensure that there would be enough homes to meet demand.
It announced this yesterday evening, as it put up three more sites from the confirmed list for tender. They can potentially yield 1,260 units.
All government land sale sites come with a project completion period (PCP) to make sure that developers finish work within a reasonable period of time. The PCP is measured from the date the site is awarded to the date the project obtains Temporary Occupation Permit.
The authorities are reducing the PCP for private residential sale sites to five years from six years, 'to further ensure more timely supply of private housing to meet demand'. The shorter PCP will apply to sites released for sale from today.
The PCP for executive condominium (EC) sale sites will remain at four years. The Urban Redevelopment Authority (URA) told BT that projects might meet unexpected delays in construction and there will not be sufficient buffer if the PCP for EC sites is cut further.
Market watchers supported the move, although they did not think there would be a significant impact on the market.
DTZ executive director (consulting) Ong Choon Fah said that most developers do want to build their projects as soon as possible to avoid holding costs and unknown market risks ahead. It would also be disadvantageous for them to hold on to 99-year leasehold sites for too long.
Nevertheless, the shorter PCP 'will give developers an additional impetus' to complete their projects, she said.
Cushman & Wakefield managing director Donald Han felt that the government made a prudent move. It is sending a signal to developers, that they should make their projects available quickly to help maintain stability in the property market, he said.
Going by information from URA, the shorter PCP is unlikely to affect most developers. URA said that based on development trends in the last eight years, the completion period for private residential sale sites was about four years on average. Also, none of the private residential projects on sale sites exceeded their stipulated PCP last year.
The shorter PCP will apply to two of the three latest sites up for sale starting today. One is a land parcel at Hougang Avenue 7. The 1.56 hectare site has a maximum permissable gross floor area (GFA) of 471,083 sq ft and can be developed into a 395-unit condominium project. Its tender will close on Sept 17.
The second is a 2-ha plot at the junction of Pasir Ris Drive 3 and 4. It has a maximum permissable GFA of 452,086 sq ft and can yield about 380 condominium units. Its tender will close on Sept 30.
The new PCP rule will not apply to an EC site at Punggol Drive/Punggol East up for sale. It is near the Kadaloor LRT station, and has a site area of 1.57 ha and a maximum allowable GFA of 574,577 sq ft. The site can accommodate about 485 units, and its tender will close on Sept 23.
More sites will be rolled out this month. URA will launch another plot from the confirmed list at Petir Road for sale; four sites from the reserve list will be made available for application.
Govt launches 3 sites, cuts time for project completion
http://www.straitstimes.com/Money/St...ry_562086.html
Aug 5, 2010
Govt launches 3 sites, cuts time for project completion
By Joyce Teo
THE Government yesterday launched three mass market residential sites for sale and cut from six to five years the time developers have to complete a housing project.
The sites - in Hougang Avenue 7, at the corner of Punggol Drive and Punggol East, and the junction of Pasir Ris Drive 3 and Pasir Ris Drive 4 - are expected to yield about 1,260 units. Their tenders close separately next month.
The three 99-year leasehold plots are the first to have the new five-year project completion period for private residential sale sites applied to them.
From today, all such sites released for sale will have to conform to the new rule, which is to 'further ensure more timely supply of private housing to meet demand', said the Housing Board in a statement yesterday.
Experts believe the change - it does not apply to executive condominium (EC) sites which have to be built in four years - will not have a major impact on the market.
Cushman & Wakefield managing director Donald Han said: 'In a peak market like now, it's not a problem at all. Developers usually take three to four years to build a mass market condo.
'It's just a precautionary measure. The Government just wants to ensure that what has been tendered out will be completed in five years, so that supply can meet demand.'
Experts note that few developers want to take too long to build on leasehold sites.
'Based on development trends in the last eight years, we found that the actual completion period for sale sites for private residential developments was generally about four years on average,' said the Urban Redevelopment Authority (URA). Only about 13 per cent of these projects took longer than five years to complete, it said.
Prior to 1997, the project completion period for government residential sites was four to five years. It was extended to eight years in late 1997 due to the then economic crisis, said the URA.
This was cut to six years in 1999 and has remained so, although the Government in last year's Budget allowed developers to apply to extend completion periods by up to one year with applications having to be made by Jan 21 this year.
Of the sites launched yesterday, the Hougang plot is 15,630 sq m in size with a maximum gross floor area of 43,765 sq m.
The Punggol site is 15,700 sq m in size with an allowable gross floor area of 53,380 sq m. It is earmarked for executive condos and is near Kadaloor LRT station.
The Pasir Ris plot is a short distance from NTUC Downtown East, has a site area of some 20,000 sq m and an allowable gross floor area of 42,000 sq m.
Ngee Ann Polytechnic lecturer Nicholas Mak predicted that the sites would attract less aggressive bids given that they are not near MRT stations.
The Hougang site may attract bids of $320-$370 per sq ft per plot ratio (psf ppr), while the one at Pasir Ris may garner bids of $350-$390 psf ppr, he said. The Punggol EC plot, being in a new estate, may draw bids of $250-$290 psf ppr, added Mr Mak.
