[B][SIZE=5]Land sales for private homes, ECs cut sharply[/SIZE][/B]

[B]Potentially 23% fewer homes in first half of 2015 compared with second half of this year[/B]


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Published: 4:02 AM, December 5, 2014

SINGAPORE — The Government has scaled back sharply the supply of land for the development of private homes and executive condominiums (ECs) in a move that property analysts say is timely following the slowdown in the housing market.

Under the Confirmed List of the Government Land Sales (GLS) programme for the first six months of next year, six residential sites that can yield about 3,020 homes, including 490 ECs, will be made available, the Ministry of National Development (MND) said yesterday. This is almost 23 per cent lower than the 3,900 units on the Confirmed List in the second half of this year and the fewest since the first half of 2010.

The cut comes after successive rounds of property cooling measures and loan curbs, including the Total Debt Servicing Ratio framework imposed in June last year, led to private home prices falling for the fourth straight quarter in the three months ended September, with sales remaining in the doldrums. And even while the measures have curbed buying, more homes are being completed to add to a rising wave of supply.

Analyst Wong Xian Yang from OrangeTee said: “The tapering of land sales signals the Government’s awareness of the huge supply in the pipeline. This should be positive for property prices and will help mitigate the current decline. Nevertheless, overall prices are still expected to edge lower slowly over the medium term as market sentiment remains muted and cooling measures remain unchanged.”

Property firm Chris International’s director Chris Koh said: “I think 3,000-plus units should be sufficient, going by market sentiment today. This sends a good signal that the Government has no intention to flood the market and, depending on sentiment, the developers can trigger any of the Reserve List sites if they are interested.”

Confirmed List sites are generally released on schedule, while those on the Reserve List are released only when a developer commits to bid at a minimum price acceptable to the Government. Sites close to the city centre, such as those in Sturdee Road, are expected to be well received. “Comparatively, sites located in the Rest of Central Region seem more attractive than those in the Outside Central Region,” said ERA key executive officer Eugene Lim.

The proportion of ECs as a total of Confirmed List units fell to 16 per cent from 39 per cent in the second half of this year, Mr Wong noted, saying this could be a sign that the Government is holding back amid waning interest for the hybrid housing type. “We see such evidence in the recent EC land tender in Sembawang Road/ Canberra Link, which ... had only two bidders. Developers have become more selective in their bids in view of recent measures targeting ECs, which saw the implementation of the resale levy and a Mortgage Servicing Ratio of 30 per cent.”

The Reserve List of the GLS for the first half of next year features nine sites that can accommodate about 5,750 homes. CBRE Research’s head for Singapore and South-east Asia Desmond Sim said such a plan gives developers the option to bid for sites when they think market conditions allow.