Friday, June 10, 2011

Govt releases another bumper crop of land sites

DEVELOPERS are set to buy enough land this year to build a record-breaking 17,510 homes, after the Government rolled out another bumper supply of sites for the second half of the year.

Of the 43 sites on the latest government land sales list, 30 can be used to build private homes - part of ongoing efforts to satisfy a seemingly bottomless demand for new housing, especially in the suburban and city-fringe areas.

Not all the land plots will definitely be sold this year. But the 17 residential sites that are scheduled to go on sale between next month and December can yield at least 8,115 new homes, the Ministry of National Development (MND) said yesterday.

This is on top of 9,395 units that can be built on the government land already sold or expected to be sold in the first half of this year.

If all this land is sold as planned, the total number of homes that can be built will beat last year's record of 13,945.

Property experts said it is no surprise the Government continues to break records with its half-yearly land supply, which it started ramping up sharply about a year ago in response to strong property demand.

But they raised two concerns: Whether this supply flood would be enough to cool the property market now, and whether it would result in an oversupply of homes when the developments are built three years down the road.

For now, the Government might need to review demand measures as well, as adding to supply does not work well in a buoyant economy due to a feel-good factor, said DTZ's head of South-east Asia research, Ms Chua Chor Hoon.

At the same time, the numerous land sales have led to an impending supply of completed homes that could be substantial, said Ms Chia Siew Chuin, director of research and advisory at Colliers International.

She warned that this might be a problem if economic conditions turn for the worse, interest rates rise or fewer immigrants enter Singapore.

Already, interest seems to be waning for government land tenders, going by some recent sales. Prices for land are still rising, but at a slower rate in some areas like Pasir Ris and Woodlands.

But Mr Marc Boey, the Urban Redevelopment Authority's (URA) group director of land sales and administration, yesterday addressed concerns of oversupply by saying developers have the flexibility to adjust completion dates according to market demand.

'Whether there is an oversupply or not depends on a lot of factors. It depends on demand and the economic conditions at that point,' he said.

'But as far as we know today, demand continues to remain strong from both buyers and developers. The economy is doing well, so we need to continue to provide that supply to meet the demand.'

Most of the new residential sites announced yesterday are in suburban areas where demand is buoyant, such as Punggol, Yishun, Upper Serangoon and Sengkang.

In fact, of the 5,300 new homes sold in the first four months of the year, more than half were in suburban areas.

A number of new sites are also near existing or future MRT stations.

The MND will also make available more sites to meet demand for office space, including a new 'white' site in Marina Bay.

The fresh release of land yesterday is likely to make developers more selective about their purchases, experts said.

Choice sites include residential plots close to MRT stations, in city-fringe locations or in new growth areas.

These include a Mount Vernon Road site next to Bartley MRT Station, and a reserve list site at Bishan Street 14, next to a residential site that attracted a record 19 bids in February.

A Jervois Road site near a 'good class bungalow' area is also expected to attract healthy interest.

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