http://www.businesstimes.com.sg/arch...ll-cool-market
Published April 17, 2012
Debate over whether selling more land will cool market
Up to 7 sites, 3,000 units on the block; some say this may feed impulse buying
By Kalpana Rashiwala
[SINGAPORE] Even as the government yesterday rolled out seven sites that can potentially generate about 3,000 private homes, a discussion has surfaced as to whether releasing more land will have the desired effect of cooling the market.
The Urban Redevelopment Authority and Housing & Development Board, as state land sales agents, yesterday launched the tenders for three private housing sites on the confirmed list - a plot near Sengkang MRT Station, another a stone's throw from Buangkok MRT Station, and the third at Pasir Ris Drive 3.
URA also announced that a reserve-list plot at Boon Lay Way near Jurong East MRT Station had been triggered for launch following a successful application by a developer.
In addition, three reserve-list sites - one next to Redhill MRT Station and two District 10 sites at Farrer Drive (next to Sommerville Grandeur and near Farrer Road MRT Station) and at the Farrer Road/Lutheran Road corner, a short distance from Botanic Gardens MRT Station - are being made available for application on the reserve list this month. The seven 99-year leasehold sites can potentially generate nearly 3,000 homes.
All seven sites are being offered under the Government Land Sales Programme for the current half and the announcement was on the same day as news that developers sold a record 6,682 private homes (excluding executive condos) in the first quarter. This surpassed the previous high of 5,578 units in Q3 2009.
Credo Real Estate executive director Ong Teck Hui said that if the current rate of developer launches and sales of about 2,000 units or more (excluding ECs) per month continues, residential land supply under the GLS programme will have to be reviewed. "It may be necessary to step up land supply, especially in Outside Central Region, to cope with the increasing demand in a buoyant market," he added.
The government supplied land under the confirmed list for a total of about 16,200 private homes including ECs last year. The supply for the first-half 2012 confirmed list is about 7,020 units.
Knight Frank chairman Tan Tiong Cheng expects choice sites in the reserve list to be triggered, such as those in locations with growth stories such as Jurong East, or in plum locations near MRT Stations and with a manageable size (such as 50-100 units) such as the Farrer Drive and Farrer Road plots.
"A lot will depend on what government puts on the table in the second-half 2012 GLS Programme. If the confirmed list is filled with run-of-the-mill sites, developers may go for choicer sites on the reserve list which they think have better potential," Mr Tan added.
Giving an alternative view, Savills Singapore research head Alan Cheong argues that the government releasing more sites may just produce an effect opposite of what it intends (to cool the market).
"The record private home sales in Q1 2012 were a result of demand chasing supply. And as more GLS sites are launched, more new home sales records could be smashed. As Freudian as this may sound, more talk of cooling measures, more talk of bigger GLS launches would be counter-productive as it goes to feed the market's innate desire to buy. The situation we're now in is similar to that for the car market where new model launches whet the desire of the public to want to own one. Impulsive behaviour therefore sets in," he suggested.
The biggest of the plots on offer is the confirmed-list plot near Sengkang MRT Station, which could yield around 710 homes. Property consultants polled by BT varied widely in their forecasts of top bids - $400 to 550 per square foot per plot ratio (psf ppr). Keppel Land paid about $502 psf ppr for the next-door site (being built into The Luxurie condo) at a tender in March 2011.
One MRT stop closer to town, at Buangkok, forecasts for top bids for a condo plot that can yield about 580 homes range from $320-500 psf ppr.
For the Pasir Ris Drive 3 site, consultants indicated the highest bids could come in at $300-460 psf ppr. A nearby site drew a $472 psf ppr top bid at a tender that closed last week.
The developer that successfully applied for the release of the reserve-list condo plot in the Jurong East MRT vicinity has undertaken to place a minimum bid that reflects about $409.85 psf ppr. DWG's senior manager, research and consultancy, Lee Sze Teck, expects between six and 10 bids for the site when it is tendered out, with the highest offer likely to be around $500-570 psf ppr.
R'ST Research director Ong Kah Seng estimates the following range of top bids for the three reserve-list sites being made available this month if they were hypothetically triggered today and put on the market: $690-740 psf ppr for the Farrer Road and Farrer Drive plots and $720-750 psf ppr for the Alexandra View plot next to Redhill MRT Station. Savills' Mr Cheong estimates top bids of $900-930 psf ppr for the two Farrer plots and $660-680 psf ppr for the Alexandra View plot, which is diagonally opposite a condo plot sold to a City Developments-led consortium in December for $754 psf ppr.
On the Farrer Road and Farrer Drive sites, Credo's Mr Ong said interested parties would factor in the unsold supply in the vicinity and sluggish demand in the prime market.
R'ST's Mr Ong notes that the Farrer Road site is near Nanyang Primary and St Margaret's Secondary schools and the Farrer Drive plot is near Good Class Bungalow Areas.
Reply With Quote
Originally Posted by ysyap
