Confirmed land sales poised for comeback

Mah says govt may bring confirmed list back next year as demand returns

(SINGAPORE) There is a 'definite possibility' that the government will re-introduce land sales through its confirmed list system from next year, Minister for National Development Mah Bow Tan said yesterday.

Right now, it is 'a question of how much we put on the confirmed list', he added.

Mr Mah was speaking to reporters at the launch of the final skybridge at the Pinnacle @ Duxton, Singapore's tallest public housing project. The project will be completed in December 2009.

Sale of state land under the confirmed list was suspended for the first half 2009 Government Land Sales (GLS) Programme to help stave off oversupply risk as the property market here was then on a downtrend.

Instead, state land was only made available under the 'reserve' list system for H1 2009 and H2 2009.

Under the reserve list system, the government releases a site for sale only if an interested party submits an application with a minimum price that is deemed acceptable.

By contrast, land parcels under the confirmed list will be tendered according to scheduled dates - which could translate to more residential property launches.

But now, with the property market on an upswing again, it seems as if state land will be made available through the confirmed list once again in the H1 2010 GLS programme.

'Yes, that is a definite possibility, to bring back the confirmed list,' said Mr Mah when asked if there will be confirmed list sites in the first half 2010 GLS programme. The H1 2010 GLS programme will be ready by the end of this year.

'As you know, we have always had a mix of the reserve list and the confirmed list, and we dropped the confirmed list when the property market was in the doldrums, when the recession hit us and we needed to remove supply from the market... but now that the market is coming back, demand is coming back and the take-up is strong, there is every likelihood that we will resume the confirmed list.'

Property analysts said the government was reacting to signals from the market that more land will be welcome.

For example, a recent government tender for a 99-year condo site at Chestnut Avenue drew 13 bids and a much-higher-than-expected top bid of $280 psf per plot ratio from two companies from the Hong Leong Group. The bid price was 2.3 times the minimum price.

However, some analysts warned that it was still difficult to tell if seeming recovery in the property market is for real.

'I think it is still early days,' said Tan Tiong Cheng, chairman of property consultancy Knight Frank. 'A lot really depends on whether the surge continues.'

There was also speculation that the re-introduction of the confirmed list could be the first action by the government to combat signs of overheating and speculative buying in the property market.

Yesterday, Mr Mah reiterated that the government is monitoring the market very closely and will take 'certain actions' if necessary.

And speaking about the HDB market, Mr Mah said that while HDB flat prices are expected to rise by another 1 per cent or 2 per cent this year, the government will continue to ensure that public housing remains affordable for Singaporeans.

Source: Business Times, 3 Sep 2009