2024 private housing supply highest since 2013 with latest 2H2024 Government Land Sales (GLS) Programme

2H2024 Government Land Sales (GLS) Programme Release

The government has announced the 2H2024 Government Land Sales (GLS) Programme, which comprises 10 sites on the Confirmed List and nine on the Reserve List. Together, these sites could yield about 8,140 private residential units, 1.22 million sq ft of commercial space, and 530 hotel rooms.

The 10 sites on the Confirmed List include eight private residential sites, an executive condo (EC) site, and a mixed-use commercial & residential site for development. In total, these sites could yield up to 5,050 private residential units and a commercial gross floor area (GFA) of 153,868 sq ft. The Reserve List has three private residential sites, two EC sites, a commercial site, two White sites, and a hotel site that will be available for application. If these sites are launched for tender and awarded, they could yield an additional 3,090 private residential units (including 730 EC units), 1.07 million sq ft of commercial space, and 530 hotel rooms.

Private Housing Market Stabilizing: MND

In the press release on June 25, announcing the latest slate of GLS sites, the Ministry of National Development (MND) says โ€œthe private housing market has shown signs of stabilisation,โ€ pointing out that the increase in private property prices moderated from an increase of 8.6% in 2022 to 6.8% in 2023.

MND adds that the marketโ€™s positive price momentum has eased with the ramp-up in the supply of private housing as part of the GLS programme over the past two years. The government has steadily increased the supply of private housing on the Confirmed List to 9,250 units in 2023 from 6,290 units in 2022, and from 3,605 units in 2021.

The supply of private residential housing introduced in the 2H2024 Confirmed List (5,050 units) is on a par with the 5,450 units released as part of the 1H2024 Confirmed List, says MND. This means that 10,500 new private residential units would be injected into the market this year. Taking into account the 610 units from the activated Reserve List site at Zion Road (Parcel B), the total private housing supply of 11,110 units is the highest influx of new private housing supply coming into the market since 2013, says MND.

Cautious Bidding by Developers

Although the pace of price increase in the private residential market has moderated from the surge in price growth a couple of years ago, market-watchers point out that some recent land tenders have seen relatively poor participation and cautious bidding.

Wong Xian Yang, head of research, Singapore and Southeast Asia, at Cushman & Wakefield, says that the relatively poor participation and cautious bidding from developers come amid heightened development risks and weakening sales volumes. โ€œAgainst this backdrop, the government has continued to push out substantial new housing supply via the Confirmed List though at a moderate pace,โ€ he says.

This sentiment was echoed by Marcus Chu, CEO of ERA Singapore, who notes that prevailing factors such as the high interest-rate environment, economic uncertainty, and slower new-home sales amidst tighter home buyer affordability may lead to developers becoming more selective and exercising more prudence in their bids.

Potential new launches awarded from sites in the 2H2024 GLS programme would only come to market in 2026 and โ€œwould not have an immediate impact on prices,โ€ says Wong. โ€œWith more launches coming onstream, buyers would remain selective and quantum-sensitive given still-high interest rates.โ€

Six New GLS Sites Introduced

The Confirmed List of the 2H2024 GLS programme introduced six new development sites โ€” Faber Walk, Media Circle (Parcel A), Media Circle (Parcel B), Chuan Grove, Holland Link, and a mixed-use site at Chencharu Close.

The mixed-use site at Chencharu Close is the largest in terms of site area, spanning 2.94 ha with a gross plot ratio (GPR) of 3.2. An estimated 875 private residential units could be developed alongside 139,880 sq ft of commercial space, and the upcoming mixed-use development will have integrated community and bus interchange facilities. The site is expected to be launched in September.

Chencharu is a new housing estate in Yishun, and development plans for this 70ha estate were unveiled in June. It will eventually have 10,000 new homes by 2040, with 80% of the new housing stock set aside for public housing.

The first BTO project in the estate was launched as part of the June 2024 BTO sales exercise. The 1,277-unit Chencharu Hills will consist of two-room flexi, and three- to five-room flats. This project will be built on the site of the former Orto leisure park.

Summary Highlights:

  • 2H2024 GLS Programme includes 10 Confirmed List sites and 9 Reserve List sites.
  • Total potential yield: 8,140 private residential units, 1.22 million sq ft of commercial space, and 530 hotel rooms.
  • Confirmed List sites: 5,050 private residential units and 153,868 sq ft of commercial GFA.
  • Reserve List sites: 3,090 private residential units, 1.07 million sq ft of commercial space, and 530 hotel rooms.
  • Stabilisation in private housing market with moderated price increase.
  • 2024's total private housing supply of 11,110 units is the highest since 2013.
  • Developers showing cautious bidding amid high interest rates and economic uncertainty.
  • Six new GLS sites introduced in 2H2024.

Interpretation: The government's sustained efforts to increase land supply through the GLS Programme aim to stabilize the private housing market and cater to the ongoing demand. The injection of new residential units, alongside a strategic distribution of sites, reflects a balanced approach to market conditions. Developers' cautious bidding indicates a prudent response to current economic challenges, while the continued release of land suggests a proactive stance in maintaining housing affordability and market stability.

Call to Action: Stay informed about the latest developments in Singapore's property market. Contact us for more detailed insights and updates on upcoming GLS sites and investment opportunities. Don't miss out on the chance to secure prime real estate and stay ahead in this dynamic market.

(Source 1)ย (Source 2)

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