Thursday, November 29, 2012

Govt to offer steady supply of residential land in 2013: analysts


SINGAPORE: The government is expected to offer a steady supply of land for residential developments in the first half of 2013.

Property-watchers said the sites offered this year have seen strong interest from developers, pushing land prices up by an average of some 10 per cent on-year.

To meet demand, the government has ramped up its land sales programme this year.

For both the first and the second half of 2012, it offered sites which could yield more than 14,000 private homes.

Of those, about half were placed under the Confirmed List, and the remaining under the Reserve List.

Analysts said the demand has been strong, with an average of 6 to 8 bids per site for land plots costing above S$200 million.

New land supply is expected to be on tap in the first six months of 2013 as well.

Nicholas Mak, executive director of SLP International Property, said: "The government is likely to offer about the same number of development sites on the Confirmed List with about another 12 to 15 other development sites on the Reserve List.

"The number of private homes that can be potentially be developed on these Confirmed List sites will probably be 6,500 to 7,500."

Under the Reserve List system, a site will only be put up for tender if the developer's minimum bid price is acceptable to the government.

Analysts said there will likely be sites for more executive condominiums, private homes and mixed developments.

Some of these sites could be in Woodlands, Jurong Lakeside and the north-eastern part of the island.

Chua Yang Liang, head of research at Jones Lang LaSalle, said: "Your Punggol, Sengkang belt coming down downtown, that area is likely to see significant proportion of overall sales, and the state will continue to use the sale programme to drive urbanisation in these areas."

Some analysts said the price gap between land prices under the government land sales programme and collective sales has narrowed somewhat this year and it could spur more activity in the enbloc sales market in 2013.

Donald Han, special advisor at HSR, said: "The pace of price increase that we saw, about 10 to 15 percent in the last 12 months for just government land sales of sites.

"That narrowing factor would moved some developers from GLS market to look at collective sale market.

"(Developers could look into the collective en bloc sale) as a purpose of land banking, rather than the GLS (which is) more for immediate turnaround, and sell into the market place)."

Analysts expect prices for government land to continue to increase, but at a slower pace next year.



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