Urban Redevelopment Authority (URA) released the land sales programme for H2 2019 on 6 June 2019. Five residential sites will be offered for sale, similar to the number offered in the H1 2019 Confirmed List. The five sites offered in H2 2019 are expected to yield 1,715 residential units, fewer than the 2,025 units expected for the five sites offered in H1 2019.
The 15% reduction in the confirmed supply of residential units for the sites in H2 2019 shows that the government is aware of the current slowdown in the residential market. The overall take-up rate of new projects launched since January hovers around 20% to date.
Based on the launch schedule, the five sites on the H1 2019 Confirmed List would be sold between July and December 2019. As for the Confirmed List for H2 2019, the five sites would likely be sold between January and June of 2020. Indirectly, this also helps to slow down the residential supply, allowing more time for developers to market the projects they have on hand.
Highlights of H2 2019 Confirmed List
Among the five residential sites offered, the Irwell Bank Road site looks the most attractive with respect to its location attributes. It is located within prime district 10 and has two frontages, one along Irwell Bank Road and one along River Valley Road. It is within a few minutes’ walk to the future Great World City MRT station which is scheduled to be open in 2021/2022. Its proximity to Great World City shopping mall and River Valley Primary School will also draw potential buyers.
Taking the cue from the bid price of $1,733 psf/plot ratio for the site of new project Riviere at Jiak Kim Street, it is likely that this site might be able to fetch within the range of $1,500 to $1,800 psf/plot ratio. Based on the recent sales at Boulevard 88, 3 Cuscaden and Riviere, it seems that investors are mindful of the price levels and leaning more towards freehold residential projects. We expect bidders of Irwell Bank Road will be more circumspect in their bids.
Besides the Irwell Bank Road site, the white site at Kampong Bugis on the Reserve List is also worthy of mention. This site is in line with the URA Draft Master Plan 2019 to be developed into a waterfront precinct. The site is to be developed into a 1,000-unit residential along with 10,000 sqm of commercial space. However, this large site poses higher risk to developers in light of the hefty taxes (non-remittable tax and ABSD) and weakening market sentiment. Nevertheless, by the time the site details are released in December, developers will have a clearer picture of the market and a better idea what the project entails. They would then be in a better position to apply for the release of the site for sale.