First sale site in Marina South, more private housing supply in govt land sales programme
First sale site in Marina South, more private housing supply in govt land sales programme. In response to record-low unsold inventory, land-hungry developers, and resilient demand, the supply of private homes under the Government Land Sales (GLS) program has been increased for the second half of this year.
The number of private homes increased 25.9% to 3,505 units in the first half of the year, representing the fourth consecutive increase in confirmed list supply.
The first site in Marina South – Marina Gardens Lane next to Gardens by the Bay – was announced by the government on Tuesday (June 7). This site is intended to kick-start development in the area.
While the 3,505 unit supply is the highest since the second half of 2014, when 3,915 units were released, some analysts call this a measured increase in light of the macroeconomic uncertainty, and expect developers to continue to tap the collective sales market to increase their land bank.
The GLS programme has 14 sites for the second half of this year, with six confirmed list sites and eight reserve list sites.
This comes on the heels of unsold inventory reaching a multi-year low of 14,087 units at the end of the first quarter, as well as strong sales at recent new launches Piccadilly Grand and [email protected]
Cushman & Wakefield’s head of research, Mr Wong Xian Yang, noted that the government has increased supply on the confirmed list in order to moderate private residential price growth and land prices.
“Forty-eight percent of total supply for the second half 2022 GLS programme will come from the confirmed list, compared to 43 percent in the first half this year and 29 percent in the second half of 2021,” he said.
The 14 sites combined can produce approximately 7,310 private residential units, 94,750 sq m of commercial space, and 530 hotel rooms.
Five private residential sites have been confirmed, including one executive condominium (EC) site and one commercial and residential site. These are capable of producing 3,505 private residential units (including 495 EC units) and 14,750 sq m GFA of commercial space.
The reserve list includes six private residential sites in River Valley Road, including two EC sites, one white site, and one hotel site, with the potential for an additional 3,805 private residential units (including 1,000 EC units), 80,000 sq m GFA of commercial space, and 530 hotel rooms.
If there is enough demand, the reserve list will provide developers with a good selection of sites to begin development on. The increase is consistent with the Government’s pledge to increase the supply of both private and public housing sites in order to maintain market stability following the December 2021 cooling measures.
However, Mr Nicholas Mak, ERA Real Estate’s head of research and consultancy, believes that there is insufficient supply to meet demand for ECs, which could fuel further price increases.
He noted that there are only 450 launched and unsold EC units in the primary market, and that while three new EC launches are in the works, they will most likely be spread out over the next 18 months.
“This means that developers will launch about two EC projects per year on average,” he added.
Analysts predicted that the Marina Gardens Lane site in Marina South, which has the potential for 795 residential units, would be the most popular.
“Developers who buy this site will have first-mover advantage in the precinct’s development because it is the first residential site out of five along the same stretch,” OrangeTee & Tie CEO Mr Steven Tan said.
However, the large size of the site and the potential large outlay of more than $1 billion may only attract a few developers, according to Mr Lee Sze Teck, Huttons Asia’s senior director for research.
Mr. Wong stated that the prime district location will “test developers’ appetite for high-end private homes in the Central Business District.”
The 45-hectare Marina South precinct will include a mix of retail, office, hotel, and residential uses and will overlook the Marina Reservoir and the Singapore Strait. According to the government, it has the potential to produce more than 10,000 homes.
According to Ms Alice Tan, head of consultancy at Knight Frank Singapore, sites on the confirmed list have seen more activity than those on the reserve list over the last two years.
According to her, only the Marina View white site, which is intended for a mixed-use development with residential, hotel, commercial, and/or serviced apartments, was released last year under the reserve list of the first-half 2021 GLS programme.
However, more developers may consider triggering reserve list sites in the next six months, she added.
“However, the sites they may trigger for release may be smaller ones, where 500 units or fewer can be built,” Ms Tan explained, “as larger sites of more than 700 units are less appealing in light of the increase in the additional buyer’s stamp duty to 35%.”
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