Singapore boosts private housing supply to 10-year high

Except for Orchard Boulevard, Pine Grove, Zion Road (Parcels A and B), and Holland Drive, most residential sites on the confirmed and reserve lists are located within the heartlands.

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In the second half of 2023, more land was set aside for private housing, bringing total supply to its highest level in a decade.

Even so, analysts believe that the new supply injection will be insufficient to cool the hot housing market for the time being.

The Confirmed list for the latest Government Land Sales (GLS) programme for 2H 2023 includes 8 sites.

Over 5,000 private residential homes will be built on these sites across Singapore.

This time around, the supply of private housing is 26 per cent higher than what was available in the first half of 2023, which included 4,090 new private residential units.

GLS 2H 2023 Confirmed ListOne of the new locations is right next to the MRT station on Orchard Boulevard.

Analysts anticipate strong demand there but warn that the higher additional buyer’s stamp duty (ABSD) may deter foreign investors.

As a result, the price and sizes must be made more palatable, in order to be more appealing to local homebuyers or investors.

Other prime sites include one on Upper Thomson Road, which has the potential to yield more than 1,500 units.

A 1.57-ha plot in Lorong 1 Toa Payoh is also one of the confirmed sites.

Market watchers say that the government hasn’t released a site for the development of a new condo in Lorong 1 Toa Payoh for about eight years.

This Toa Payoh GLS site could yield approximately 775 private residential units.

Another prominent site on the list would be the one along Zion Road (Parcel A)

It has a land size of approximately 1.51-ha and a plot ratio of 5.6. URA estimates that the site could yield 955 units and 25,824 square feet of commercial space.

It is also directly connected to Havelock MRT Station which is situated along the new Thomson-East Coast MRT Line.

Analysts believe that this Zion Road GLS site may receive a top bid of more than $1,300 per square foot per plot ratio (psf ppr).

Zion Road GLS Parcel A

The former Jiak Kim Street GLS site, which has been redeveloped into Riviere by Frasers Property, is adjacent to this land parcel.

The GLS site drew 10 bids, with Fraser Property’s winning bid topping out at $1,732 psf ppr.

According to one analyst, plots set aside for executive condominiums (ECs) will likely see strong buyer demand as well.

This is because there is still a significant price difference between new suburban private homes and a new EC.

Furthermore, those who are upgrading from an HDB flat do not have to pay ABSD if they purchase these ECs.

Even with more private houses on the way, analysts believe the property market will remain hot in the short term as the new launch condo projects will not be available for purchase until 2024, with some possibly in 2025.

As a result, the property market may not feel the effects until next year or the year after.

Analysts also noted that property developers will be more cautious and selective in their bids for new sites as most property developers already have enough supply in their land banks or inventory.

Furthermore, there is a lot of uncertainty right now because of the current economic conditions, as well as the high-interest rates, which are increasing the overhead for developers, including high construction costs.

In addition to private homes, the Urban Redevelopment Authority (URA) has set aside three plots for developers to build additional office and retail space.

This includes a site on River Valley Road for hotel development.

 

Source MND Release
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