Property forum raises concerns over site hoarding

Property
Published August 31, 2006


Property forum raises concerns over site hoarding
Focusing on prime areas may affect urban renewal


By UMA SHANKARI



A PROPERTY forum on the popular en bloc and redevelopment issue held yesterday raised fears that developers are snapping up land - and sometimes sitting on them - at a cost of what might be best for the market.


Industry players were also worried that with developers focusing on the prime districts when it comes to buying sites, these areas could be developed at the cost of the rest of Singapore - which does not bode well for Singapore's overall urban renewal plans.

And those present at yesterday's Singapore Property Research Forum also pointed out that with the potential supply of new residential units set to climb - with developers going on a buying spree after years of holding back - the market could soon see a glut of homes.

'This grabbing of land and building up land reserves has a lot of implications for planning,' said Malone-Lee Lai Choo, from the National University of Singapore's real estate department.

Developers, said Dr Malone-Lee, might not act in the market's best interests when deciding when to launch the sites they are sitting on - unlike the government.

She added that this trend could lead to a redefinition of the role of the government's Government Land Sales Programme, which might have to focus on certain types of sites or seek to control the public sector through increased development charges, which might dampen the en bloc fever.

Another concern raised is that with the central area continuing to draw new investments through en bloc sales and redevelopment programmes, the 'fringes' could suffer.

Data from property consultancy Credo Real Estate, which specialises in collective sales, shows that in the last 14 months, of the 75 en bloc sales that have taken place, 71 per cent were in the prime districts of 9,10 and 11.

More government intervention and incentives might be needed to encourage redevelopment outside the prime districts, Dr Malone-Lee said.

Industry players also expressed worries that with the record number of en bloc sales in the past 12 months, there may be an over-supply of homes across Singapore.

The net supply of potential new units in Singapore is set to rise by more than 4,200 from collective sales transacted from July 2005 to August 2006, according to figures from Credo.

Credo's data also shows that since the start of the year, 41 collective sale transactions - worth more than $4.5 billion - have taken place.

But Credo's managing director Karamjit Singh was not worried, saying that the buying has not been overdone.

'So, far, they (the number of new potential units) are not alarming yet,' he said. And he does not expect the en bloc fever to cool any time soon.

'As long as the outlook (of the property market) is good, developers will buy; it is as simple as that,' Mr Singh said.