Singapore Ramps Up Housing Supply With Biggest Land Sale Plan in a Decade

Singapore on Wednesday unveiled plans to put up for sale eight residential sites in the second half of the year as part of the government’s plan to boost private home supply and tame a red-hot housing market.

Under the confirmed list of the government land sale (GLS) programme for the August to December period, the Urban Redevelopment Authority (URA) is set to auction off projects that can be developed into up to 5,160 new private homes, including 560 subsidised condos.

The supply of new housing marks a 26 percent increase from the programme in the first half of this year, which featured seven sites which can provide 4,090 new homes. In terms of housing units, it was also the highest half-year home total announced in a GLS programme since the second half of 2013.

“The government is in tune with market demand and has an eye on keeping a lid on further price increase by ensuring there is an adequate supply of upcoming new homes to meet housing needs,” said Ismail Gafoor, chief executive officer of PropNex Realty. “Apart from recent cooling measures which are aimed at taming investment demand, we believe releasing more supply into the market will also help to prevent a sharp run-up in home prices.”

Boosting Suburban Supply

Geographically, around half of the new housing supply in the upcoming programme is located in the suburban areas referred to officially as the Outside Central Region (OCR). Some 26 percent of the supply will be in city fringe locations called the Rest of Central Region in local nomenclature and nearly a quarter will be located in the city centre.

PropNex’s Gafoor said that a 1.34-hectare (3.3-acre) plot on Clementi Avenue 1 in Singapore’s southwest region will likely garner strong interest from developers, due to its proximity to educational resources like the Nan Hua High School and the NUS High School of Mathematics and Science. The site can accommodate around 500 new condos and will be put on the market in August.

That same month, URA will also launch a tender for a 2.5-hectare parcel in Pine Grove which could supply 565 new homes in the Clementi area.

With the Pine Grove plot located next to a recently sold site, and a pair of adjoining sites on Upper Thomson Road set to be launched in December, Gafoor expects these connected parcels to attract more modest bidding from builders due to the potential for sales competition between neighbouring projects.

The poshest plot on the programme may be a site on Orchard Boulevard in the city-centre, which can yield 270 condos and 500 square metres (5,382 square feet) of new commercial space connecting directly to the Orchard Boulevard MRT station in Singapore’s best known shopping district. However, recent policy changes could temper demand for the upscale location.

“While this site is relatively prime, we think developers will be cautious given the recent hike in additional buyer’s  stamp duty rates which will moderate demand from investors and foreigners, who tend to be keen on such Core Central Region projects,” Gafoor said.

Strong Demand Continues

Also within central Singapore, the URA is set to open bidding for a 1.57-hectare site in Lorong 1 Toa Payoh in September that can yield up to 775 homes.

The plot should be attractive to developers given strong demand for housing in the Toa Payoh neighbourhood, according to Wong Xian Yang, research head for Singapore and Southeast Asia at Cushman & Wakefield.

“In the current landscape where developers face heightened development risks, they are likely to prefer markets with a strong demand track record,” he added.

A mixed-used plot along Zion Road in the River Valley district – also within the central region – will be open for bids in December and can provide 955 homes alongside 2,400 square metres of commercial space.

The URA’s reserve list of sites, which can be launched onto the market in cases of developer demand, includes another six residential sites, a commercial plot in Punggol Walk, one hotel project along River Valley Road and a “white site” for mixed-use development on Woodlands Avenue 2 in northern Singapore.

“Recent healthy home sales at new launches such as Tembusu Grand, Blossoms by the Park, and The Reserve Residences indicate that demand for new private homes is resilient, in spite of two rounds of cooling measures, elevated interest rates, and a slower economic growth outlook,” said Gafoor.

URA data released last week showed sales of new private homes in the city-state grew 17 percent to 1,038 units in May from the previous month, reaching the highest monthly tally since 1,355 units were sold in May of last year.

Nearly three-fourths of the home sales last month came from two new projects in city fringe locations, specifically The Continuum, a project of Hoi Hup Realty and Sunway Developments in Geylang and The Reserve Residences, a joint venture of Far East Organization and Sino Group in Bukit Timah.