Five residential plots for 2,330 homes on confirmed list

The former Zouk nightclub at Jiak Kim Street.
The former Zouk nightclub at Jiak Kim Street.PHOTO: ST FILE

Land-starved developers may be hungry for a whole turkey, but they got only a drumstick and a little more yesterday when the Government only marginally increased the supply of sites for next year.

Five private residential plots that could yield 2,330 units in all were put on the confirmed list for the first half of 2017.

That means more units than the number for the first half of this year when land on the confirmed list yielded only 1,560 homes - the lowest figure in recent years.

And it tops the 2,170 units yielded from the confirmed list in the second half of this year and is closer to the final total of 2,445 homes, given the sale of a reserve list plot.

But some analysts were surprised that the increase was not more marked. Ms Tricia Song, head of research at Colliers International Singapore, noted that while the supply in the confirmed list rose by 7 per cent over the first half of this year, the reserve list supply fell by 4 per cent.

 

Overall, the total supply of 7,465 units from the first half land sales programme for 2017 is comparable to the 7,545 units offered in the second half of this year.

Ten sites, including one mixed- use and two commercial sites, were put on the reserve list and are expected to yield 5,135 units.

"In view of the bidding interest and aggressive bids seen this year, we are slightly surprised that the Government did not increase the residential supply," Ms Song said.

Dr Lee Nai Jia, Edmund Tie and Company's head of South-east Asia research, said "there was a lot of talk that there was going to be more supply due to the competitive bidding".

However, he noted that bidding activity is just one of many indicators the Government looks at in determining how much land to release. Other factors include economic growth and home sales in a particular area.

Sales of private homes this year have been robust, with 7,996 shifted in the first 11 months, exceeding last year's full-year total of 7,440.

But Mr Nicholas Mak, SLP International's head of research and consultancy, warned that the strong demand may come from investors and not those buying to occupy.

There could be a threat of oversupply of smaller units, which are mostly bought for investment, he said.

There is a notable lack of executive condominium (EC) sites on the confirmed list released by the Ministry of National Development yesterday, and there is just one, in Sumang Walk, on the reserve list. This plot was carried over from the Government Land Sales Programme for this year.

Ms Christine Li, Cushman and Wakefield's director of research, attributed this to concern over vacancy rates in the non-landed segment that the Monetary Authority of Singapore flagged last month.

There were still 3,005 unsold EC units as of Sept 30, which Ms Li said was enough to meet demand.

"EC vacancy rates remained elevated at 10.8 per cent in the third quarter this year, higher than that of the non-landed private residential units, at 10 per cent for the same period," she added.

Likewise, no new commercial sites were put on the confirmed list, Ms Li noted, as there was concern over an imminent spike in supply of office space.

Market watchers were excited about the new sites on the confirmed list, with many singling out a parcel in Woodleigh Lane.

Mr Ong Teck Hui, JLL's national director of research and consultancy, predicted between seven and 10 bidders for the site, which he said was the most attractive of the five confirmed plots.

He noted that the site is in the city fringe, as well as close to the Woodleigh MRT station and upcoming Bidadari new town.

Zouk fans might get a chance to relive their memories of the popular nightclub as the Jiak Kim Street plot on which the club was sited is on the reserve list. Analysts said the waterfront plot is likely to be triggered by developers.

A version of this article appeared in the print edition of The Straits Times on December 17, 2016, with the headline 'Five residential plots for 2,330 homes on confirmed list'. Print Edition | Subscribe