Govt releases 4 home sites in one go

Four more residential sites – on which more than 1,200 private homes can be built in total – were released for sale by the government yesterday.

The Urban Redevelopment Authority (URA) yesterday also reiterated that the potential supply of land from the government’s land sales programme and the supply from projects in the pipeline will be ‘more than sufficient to meet the demand for private housing’.

‘The government will continue to monitor the property market closely,’ URA said. ‘If necessary, more supply can be injected via the second half 2010 government land sales programme to ensure that property prices are in line with economic fundamentals.’

Private home prices rose 7.4 per cent in Q4 2009 after climbing 15.8 per cent in Q3. For the whole of 2009, prices of private residential properties rose by 1.8 per cent.

Analysts have said that that the URA price index is likely to show an increase in Q1 2010 as more higher-value projects have been sold in the current quarter. The index will be released in April.

Yesterday, URA said it is releasing three residential land parcels – one each at Boon Lay Way, Simei Street 3 and Stirling Road – for sale. The agency last released three sites for sale at one go in January 2000.

And in addition to that supply, the Housing & Development Board (HDB) also plans to launch a residential site at Tampines Road for tender in about two weeks’ time. HDB is releasing the site as it has been triggered by a bid from an unnamed developer.

Analysts said that the government’s ‘very rare’ move of releasing four sites on the same day was designed to emphasise its often-repeated point that the supply of land and homes is more than enough to meet demand.

The upcoming supply from the four sites could also moderate the climb in private home prices.

Colin Tan, Chesterton Suntec International’s research and consultancy director, said that it was ‘positive’ that URA & HDB are co-ordinating their efforts and pushing out development sites quickly.

‘This should stem the overly aggressive bids we have seen in recent weeks and also stem future price escalations from the supply side. Because if developers pay too much for their sites, their initial selling prices may be higher to recover the land cost,’ Mr Tan said.

URA’s three sites can potentially yield about 1,180 private homes. The sites are ‘well-distributed across the island, namely in the west, east and central regions, to provide developers and home-buyers with more choice’, the agency said.

Two of the three land parcels released by URA yesterday – the sites at Boon Lay and Simei – are being offered under the confirmed list. The third site at Stirling Road was placed on the reserve list – which means that it has to be triggered for sale before the government will launch it.

Chua Chor Hoon, head of DTZ’s South-east Asia research team said that both sites on the confirmed list were attractive. She estimates that the site on Boon Lay Way could go for $330-$390 per square foot (psf) of potential gross floor area, with homes there eventually selling for $720-$780 psf.

A comparable property in the vicinity will be Frasers Centrepoint’s Caspian, where units are currently selling for $647-$732 psf.

Ms Chua also predicted that the site at Simei could go for a slightly pricier $360-$410 psf of potential gross floor area.

Homes on the site could eventually sell for $750-$800 psf. Nearby, units at Double Bay Residences are going for $680-$746 psf, she said.

Interest is also expected to be strong for HDB’s Tampines site. The site, which has been on the reserve list for the past few years, will be put up for tender after a developer committed to bid at least $6.5 million for it.

It could prove to be popular as smaller developers – who could not compete in recent government land tenders as the prices were too high – could be attracted to it, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.

He added that although the land parcel could be developed into apartments or landed homes, it is more likely that the developer will build an apartment block of 35 to 45 units on this site.

In an update, URA said that the government has sold four residential sites since January 2010. The four land parcels can potentially yield a total of 1,710 housing units.

Another two private residential sites, one at Sembawang Road and another at Upper Serangoon Road, will be released for sale via the confirmed list next month.

Source: Business Times, 24 Mar 2010