Govt to offer slew of sites for homes

Eight confirmed sites and as many as 26 to allay fears of shortage
(Abstract from The Strait Times 7th Nov, 2009 by Joyce Teo)

THE Government acted ahead of schedule yesterday in following through on its pledge to release plenty of land sites to meet strong demand for mass market homes outside the city centre.

In the first half of next year, at least eight residential sites - and as many as 26 sites - will be offered to developers.

The move is being seen as a bid to allay fears of a shortage of these homes - often bought by HDB upgraders - which may have sent prices surging.

The 26 sites could produce 10,550 private homes - the highest number from any half-yearly government land sales since the second half of 2001, said the Urban Redevelopment Authority (URA).

In an announcement that came a few weeks earlier than usual, the Government said it would put eight residential sites, including two executive condominium (EC) sites, on the confirmed list. This is where sites are put up for sale regardless of developers' prior expressions of interest.

These sites could boast about 2,925 new homes, close to the boom time 3,000 in the second half of 2007.

'There's some anxiety about housing supply, so its better to tell people that there will be adequate supply,' said URA senior group director of land sales and administration Choy Chan Pong.

'The private residential market has seen very strong demand in the past eight months, so we want to ensure there is enough supply to meet demand, so that prices can move more in sync with economic fundamentals,' he said.

To calm the market, National Development Minister Mah Bow Tan, in mid-September, flagged the move to reinstate the confirmed list after it was suspended for about a year.

Sales of new private homes this year are now above 12,828 units and could hit 2007's record of 14,811 units. Developers have thus been bidding for land at much higher than expected prices.

The high-end homes market has not fully recovered, but mass market prices are now similar to levels seen in the previous boom, sparking fears of runaway mass market prices, experts said.

'The programme will ensure the property market stays stable and price increases are kept to moderate levels,' said Knight Frank's executive director of residential, Mr Peter Ow.

Aggressive bids by developers could also become a thing of the past.

The Government is trying to calm panicky buyers as well as developers who have been tendering for sites at record prices, said Cushman & Wakefield managing director Donald Han.

Of the 26 sites for residential use on the land sales programme, 10 are new sites, not rolled out previously.

In January, the Government will push out three confirmed sites, including a new EC site in Buangkok Drive.

The five EC sites, one new, will mean the largest EC supply since 2000.

'Putting two ECs on the confirmed list reflects the Government's concern about the widening gap between HDB resale prices and private housing prices,' said DTZ head of South-east Asia research Chua Chor Hoon.

Two of the 26 residential sites are mixed-use, whereby private homes can be built. Another 16 are on the reserve list, whereby sites are offered for sale after a developer commits to a minimum bid.

Two confirmed list sites near MRT stations - in Pheng Geck Avenue and Simei Street 3 - are very attractive, and could fetch $400 to $500 per sq ft of gross floor area, Mr Ow estimated.

Units on the sites may then sell for close to $1,000 psf, he added.

On the reserve list, the sites likely to be triggered for tender are in Bishan Street14, Bartley Road and Stirling Road, said CBRE Research.

In all, 42 sites are available for sale in the first half of next year, comprising 24 purely residential sites, two mixed use sites that must include residential use, five commercial sites, 10 hotel sites and one site permitting a range of uses.

joyceteo@sph.com.sg