[SINGAPORE] Property consultants polled by BT gave a mixed bag of views on what could be in store for the Government Land Sales (GLS) Programme for the second half, reflecting the challenges ahead for Singapore's property market.
Some are expecting the Ministry of National Development (MND) to maintain the overall quantum of land supply for private housing development (including executive condos) at a similar level as the current H1 2013 slate - citing still-strong developer sales in addition to the need to cater to the anticipated population growth in the medium term.
However, others reckon MND could trim the quantum of land for executive condos (ECs) - currently a hot discussion topic - assuming there will be less demand for this public-private hybrid housing should the authorities decide to scrap the housing subsidy for first-time buyers of ECs.
Jones Lang LaSalle's national director of research and consultancy, Ong Teck Hui, said that any change to the EC scheme should be preceded or accompanied by a policy announcement. "It would be a bit drastic to stop selling EC sites immediately as the government should explain how the 'sandwich class' will be taken care of." The term refers to those with incomes exceeding limits set for buyers of new public housing flats but who find private homes beyond reach.
DTZ's SE Asia chief operating officer Ong Choon Fah observed that the government will continue to supply land for private housing development as long as there is demand "so prices are sustainable". However, it will have to factor in the large number of residential units under construction - in both the private and public segments, she added. "Who will occupy them upon completion?"
Some market watchers reckon the authorities may be leaning towards allocating a higher proportion of total private housing land (including ECs) on the reserve list than in the confirmed list; currently, the split is even.
"This will allow the market more flexibility to trigger sites on the reserve list based on . . . demand, rather than be constrained by a confirmed sale date," said CBRE Research associate director Desmond Sim. A reserve list will be launched only upon successful application by a developer. Confirmed list sites, on the other hand, are released according to a prestated schedule regardless of demand.
CBRE predicts that the H2 2013 GLS Programme will yield up to 11,000 private homes (including ECs) - with about 3,000-4,000 units on the confirmed list and the majority 6,000-7,000 units on the reserve list.
However, Colliers International's director of research and advisory Chia Siew Chuin suggests that the government is likely to maintain supply at around 6,000-7,000 units (including ECs) for each list, as there is still demand. That being said, she reckons the authorities could allocate some EC sites in the reserve list instead of channelling all of them through the confirmed list as is currently the case.
Savills Singapore research head Alan Cheong says that the key challenge for MND is to be careful not to oversupply the market in the short term. "This was what happened in 2011, when they sold land for over 14,000 private homes excluding ECs. This led to demand in the developers' sales market chasing supply when these homes came to launch in 2012, and that fuelled fears of a physical oversupply when these units are completed around 2015," he recalled.
For the H2 2013 slate, he reckons the authorities could probably afford a drop in the supply of residential land in the confirmed list and yet attain similar revenue - due to increased land prices over the past year. This will address fears of a glut.
Mr Cheong also expects MND to stage simultaneous tender closings for some residential sites in the same vicinity to rein in the trend of developers bidding higher and higher prices if the sites are sequentially offered instead.
As for commercial (that is, office and retail) sites, expectations are running high that MND will step up the release of land in the suburbs to catalyse decentralisation plans. Colliers' Ms Chia expects a few commercial plots to be rolled out in Jurong East, Paya Lebar and Woodlands. DTZ's Mrs Ong notes that releasing land in Woodlands - which has not quite taken off as a regional centre - at this juncture would help to tap synergies with the ongoing development of Iskandar Malaysia. To support the development of a waterfront dining strip in the Jurong Lake District, CBRE suggests that the state could put on the market sites for food and beverage use near Chinese Garden.
Alice Tan, head of consultancy and research at Knight Frank, reckons that to optimise the utilisation of the Circle Line, sites may be launched near MRT stations on the Line, probably along the Haw Par Villa to Telok Blangah stretch.
Colliers' Ms Chia said that MND will offer suburban commercial sites predominantly through the reserve list, although there could be one or two on the confirmed list. However, it is unlikely that the state will push out any large office sites in the CBD through the confirmed list at least for the next six months, given the ample supply pipeline - comprising South Beach, GuocoLand's Tanjong Pagar Centre, and the mega projects of Duo (in Ophir Road) and Marina One.
As for hotel sites, JLL's Mr Ong suggests these may again be confined to the reserve list. DTZ's Mrs Ong said that MND will take into account that demand for hotel rooms appears to be slowing. "With the manpower issue, they will be mindful of the number of rooms to put on the market."
Source: Business Times, 3 Jun 2013