Govt’s 2H2021 land sales still cautious, despite 25% increase in housing units

/ EdgeProp Singapore |
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New private home sales in May 2021 to-date, based on URA Realis data, is estimated to have fallen 30% from April, says JLL (Photo: Samuel Isaac Chua/EdgeProp Singapore)
SINGAPORE (EDGEPROP) - The launch of the 2H2021 government land sales (GLS) programme on June 10 showed the same number of sites released in both the Confirmed and Reserve Lists - 13 in total. However, the four sites released on the Confirmed List yields 2,000 residential units, about 24.6% higher than it was for 1H2021. (See also: GLS sites at Jalan Tembusu and Tampines St 62 released for application)
This ramp-up in supply is the steepest since 2H2016 when supply was hiked by 39.1%. “It is a good response to the hunger for land displayed by developers in recent GLS tenders,” says Mark Yip, CEO of Huttons Asia.
Credit: Knight Frank Singapore Research
While the increase in supply over the 1H2021 Confirmed List is significant, it is still “a conservative and cautious programme”, notes Ong Teck Hui, JLL senior director of research and consultancy. “The recent wave of Covid-19 infections that prompted Phase Two (Heightened Alert) measures shows that the economy and residential market can be disrupted from time to time by the pandemic,” he says. “This creates more uncertainty and will have an impact on transaction volumes and possibly prices.”
New private home sales in May 2021 to-date, based on URA Realis data, is estimated to have fallen 30% from April, Ong points out.

Well spread out

The four sites on the Confirmed List are well spread across the island, providing opportunities for buyers interested in different locations, Ong observes. The Jalan Tembusu site is in the Tanjong Katong area in the east, Lentor Hills Road (Parcel A) is in Ang Mo Kio in the north-east, while the site at Dairy Farm Walk is in the west. The executive condominium (EC) site Bukit Batok West Avenue 8 is also in the west.
Credit: URA
Two of the sites, namely the Jalan Tembusu and Dairy Farm Walk, were previously on the Reserve List, and have been moved to the Confirmed List in the 2H2021 programme. The two new land parcels at Lentor Hills Road – Parcel A on the Confirmed List (to be launched for tender in September), and Parcel B on the Reserve List – come on top of the existing site at Lentor Central that was launched for tender on April 15, which is closing on July 22.
“We believe it is a calculated move to ensure that the tender bids for Lentor Central are measured because there will be another site that will be launched for sale in two months,” says Lee Sze Teck, Huttons Asia director of research.
Credit: URA
“All four residential sites have their respective strong attributes and should see strong demand from developers,” says Lee Liat Yeang, senior partner of Dentons Rodyk’s corporate real estate practice.
Dentons’ Lee reckons the Lentor Hills Road should ride on the impending success of the neighbouring Lentor Central site. “The convenience of Lentor MRT Station cannot be overstated,” he adds. Meanwhile, the Dairy Farm Walk site is situated next to a low-rise landed estate and within walking distance from Hillview Station along the Downtown Line. It’s also near the German European School, he points out.

“Cream of the crop”

Credit: URA
The Jalan Tembusu site is “the cream of the crop”, according to Dentons’ Lee. With a high plot ratio of 2.8, the high-rise condominium will have an uninterrupted view of the private housing estate of Goodman Road-Branksome Road-Parkstone Road. It’s also located “opposite the row of shophouses with plenty of food and the famous Punggol Nasi Lemak”, he says. (See: Discover insightful data of any Singapore condominium with our condo directory)
The EC site at Bukit Batok West Avenue 8 is within a fairly mature estate, notes Dentons’ Lee. “It should do very well because the EC market is one in which developers appear confident of the underlying demand,” he adds. “This site might well set a new record for ECs.”
Credit: URA
The most recent EC site sold in the vicinity was the Tengah Garden Walk EC site, which was awarded in May this year at a record land price of $603 psf per plot ratio (psf ppr), says JLL’s Ong. “It is good to offer an EC site in the west after releasing the Tampines Street 62 (Parcel A) site which is in the east (under the 1H2021 programme) so that EC buyers are able to find opportunities in different geographical areas,” Ong adds. The Bukit Batok EC site can yield about 375 units.
While this recent slate of new sites is a good start, Dentons’ Lee reckons it may still be insufficient to satisfy developers’ demand. Based on the results of the recent GLS tenders, “you can sense the strong underlying demand”, he says.
Nicholas Mak, ERA Realty head of research, agrees. He says: “We can expect a similar double-digit number of bids in the upcoming tenders for sites such as Jalan Tembusu and Lentor Hills Road in the new GLS programme.”

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