The Government today announced the Government Land Sales (GLS) Programme for the first half of 2022, which comprises five Confirmed List sites and eight Reserve List sites.
The Reserve list can potentially yield 3,715 private residential units and 530 hotel rooms. All together the Confirmed List and Reserve List for 1H2022 can yield about 6,500 private residential units, which is about 5% lower than 2H2021 GLS potential supply of 6,860 units.
The sites on the Confirmed List are estimated to yield approximately 2,785 private homes (including executive condominiums). This is around 785 units more (39% increase) than the 2,000 units released from the 2H2021 Confirmed List and the third consecutive increase in Confirmed List supply. In terms of the number of residential units, the semi-annual increase in Confirmed List supply is the steepest in over a decade. Nonetheless, the total level of confirmed list supply remains relatively manageable and is similar to levels seen in 2H2017 to 2H2018, when confirmed list supply ranged by about 2,705 units to 2,840 units.
The increase in Confirmed List housing supply came following the announcement of new cooling measures last night. The intent is to moderate private residential price growth by tapering demand via cooling measures and increasing housing supply by ramping up supply in the Confirmed list. This is also expected to moderate the growth in private residential land prices, which have surged over the past year.
The five sites on the Confirmed List are well spread across the island, giving opportunities for buyers interested in different localities. Lentor Central and Lentor Hills Road sites are located in Ang Mo Kio in the North-East, Bukit Batok West Avenue 5 (EC) site is in the West while both Dunman Road site (Marine Parade planning area) and Pine Grove (Bukit Timah planning area) are in the Central region.
Among the five sites on the Confirmed List, interest is expected to be strong for the Pine Grove (Parcel A) site.
The Pine Grove (Parcel A) land parcel can generate an estimated 520 residential units. Located within a private residential estate, the land parcel is connected to major roads and expressways such as Ayer Rajah Expressway (AYE), Clementi Road and Ulu Pandan Road with Clementi and Dover MRT stations being about 1km away. They are also located within close proximity to popular primary schools such as Nan Hua Primary School, Pei Tong Primary School and Henry Park Primary School, which are appealing to families with young kids. There is also strong demand for new launches in this locality. Nearby new launches, Parc Clematis and Ki Residences At Brookvale are already 94% and 78% sold out as of Nov 2021.
The only mega-site on the list is the Dunman Road site which can generate around 1,035 units. This site also has strong locational attributes as it is located within comfortable walking distance to the Dakota MRT station as well as various amenities such as the popular Old Airport Road food centre. While the recent cooling measures might crimp demand slightly for the site, given its size and higher development risk, owner-occupier demand for future development is expected to be strong given its strong locational attributes. As such, larger developers or consortiums would be keen on this site.
The Lentor Central and Lentor Hills Road (Parcel B) land parcels can yield an estimated 470 and 265 units. Both sites are poised to be launched in May 2022. The sites are located within close proximity to the upcoming Lentor MRT Station and nearby amenities in Ang Mo Kio Town. These are the third and fourth sites to be offered for sale in this Lentor area, following the sale of Lentor Central site in July 2021 (Launched in April 2021) and the launch of Lentor Hills Road (Parcel A) in September 2021. This is in line with the government’s plan to build a new neighbourhood in the Lentor Hills area. The tender for the Lentor Central site was closed with 9 bidders and a top bid of SGD 784.1 million (or SGD 1,204 psf ppr). While both Lentor sites may be attractive due to their proximity to the MRT station and palatable quantum, they would potentially face stiff competition during launch due to a relatively quick succession of sites in the area. Summing up potential units from all four sites (launched and on 1H22 confirmed list), this would yield close to 2,000 private residential units in the locality over the next 2-3 years. There is also another site (Lentor Gardens: 535 units) on the reserve list.
The EC site at Bukit Batok West Avenue 5 can yield about 495 EC units and is likely to be in good demand given the moderate supply of new EC projects in the west. The latest cooling measures is expected to have a limited impact on EC buyer demand as the increase in ABSD rates do not affect new EC buyers. The most recent EC site sold in this area was the Tengah Garden Walk EC site, which was awarded in May this year at a record land price of SGD 603 psf ppr. The tender for the adjacent Bukit Batok West Avenue 8 (EC) site (estimated 375 units) is scheduled to be launched this month.