MND expects to maintain supply of private housing sites in H2 2015
According to property consultants and a couple of market watchers, it’s being expected that the Ministry of National Development (MND) will maintain the land supply for private housing for the 2nd half of 2015 as compared to the 1st half, or there will be a slight reduction. They’ve also forecast that MND may trim down the the supply of lands under the confirmed list, and increase the supply numbers under the reserve list.
With regards to the supply issue of housing sites for executive condominiums (ECs), a small number of analysts argued that there isn’t a need to released more of such land plots under the confirmed list in the impending Government Land Sales (GLS) Programme for the 2nd half of 2015, due to the implementation of the “executive condominium resale levy” which has weaken the market sentiment for purchasing this public-private housing hybrid.
As for the commercial segment, market watchers have also suggested that due to the fact that there will be substantial amount of office spaces expected to complete at the start of 2016, it is unlikely that MND will be releasing much office sites on the confirmed list for the upcoming GLS Programme. However they may adopt a similar strategy as applied in the H1 2015 GLS Programme, which we saw such commercial sites were only available under the reserve list. It was highlighted by property analysts that there will unlikely be a large increase in the land supply for retail usage due the sluggish market and labour constraints. Even for the hotel segment, due to the existing labour crunch and slump in tourism arrivals, MND will be expected to maintain their policy of not putting up any plots for hotel developments on both the confirmed and reserve lists.
For the GLS Programme, regardless of demand, land plots or sites which are on the confirmed list will be launched and open for tender from property developers according to a fixed schedule. Whereas those on the reserve list will only be launched upon a triggering bid from a property developer.
Since the 2nd half of 2010 to 2nd half of 2011, MND has reduced the supply of land plots on the confirmed list for private residential housing (including ECs) during its GLS Programme occurring half-yearly, from approximately 8,100 units for each half, to about 7,000 for 1st & 2nd half of 2012 and 1st half of 2013 each . The supply was further reduced for the next 2 years where MND only released sites on the confirm list for catered for only 3,020 residential units in 1st half of 2015.
Mr Ong Teck Hui, national director of JLL has noted that it will be logical for MND to maintain the supply numbers in 2nd half of 2015 as compared to the 1st half. He also mentioned that there is still healthy demand for land plots by property developers due the easing of land prices, and this could enhance property buyers’ interest as future new launch developments may be priced in a more affordable range.