Lowest number of private residential units released since 1H2007 GLS programme

By
/ EdgeProp
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December 6, 2018 4:52 PM SGT
The government has released its list of government land tenders that will launch in the first six months of 2019. The 1H2019 Government Land Sales (GLS) Programme includes five sites on the Confirmed List and nine sites on the Reserve List. When developed, they could yield up to 6,475 private residential units, 1,115 hotel rooms, and 925,695 sq ft of commercial space.
Many property consultants have noted that the number of private residential units that could be developed from the 1H2019 GLS list has been significantly reduced to mitigate a potential oversupply situation developing over the next few years. According to URA, the current pipeline supply of private residential units in the market stands at about 45,000 units, comprising 31,000 unsold units from past GLS and en bloc sale sites that have been granted planning approvals, as well as 14,000 units are from sites pending planning approval. In addition, close to 28,000 existing private residential units remain vacant.
The number of private residential units (including executive condominiums) that could be yield from the Confirmed List has decreased by 25%, from 2,705 units in the 2H2018 GLS programme to 2,025 units in the 1H2019 GLS programme, says Christine Sun, head of research and consultancy at OrangeTee & Tie. Since the recent property cooling measures imposed in July this year, overall transaction volumes of private residential units have declined and developer’s demand for land has moderated. This led the government to moderate the supply of units for the 1H2019 GLS programme, URA says.
The last time such an “obvious cutback” in the number of private residential units that could be developed occurred was in the 1H2007 GLS programme, when 5,475 units were released. At that time, it also coincided with a blitz of collective sales, says Desmond Lim, head of research at CBRE. The 1H2019 GLS programme is also the lowest number of residential units in both the Confirmed and Reserve Lists since the 1H 2007 GLS programme, says Christine Li, head of research at Cushman & Wakefield.
Demand for new private residential units is expected to recover “moderately” next year to...