Call for more residential development sites

The strong private residential sales momentum of 2020 has carried over to 2021. Furthermore, preliminary estimates of the Urban Redevelopment Authority (URA) residential price index in 2020 showed that private home prices have risen by 2.9% over the fourth quarter of 2020. Should the sales momentum continue, prices are expected to increase at a firmer pace this year.

With more than 3,000 new private sales in the first quarter of 2021, developers whose projects are gradually selling down have begun sourcing to replenish their land banks. The upcoming Government Land Sales (GLS) tenders are expected to be very well participated and bids are likely to be competitive.

First off the list is the tender sale of Northumberland Road (405 units) on Apr 27, 2021, followed by Ang Mo Kio Avenue 1 (370 units) and Tengah Garden Walk executive condominium (615 units) site on May 25 and Jalan Anak Bukit (845 units) on June 29. These are all from the H2 2020 GLS programme

Supply from the GLS programme remained subdued in H1 2021, with only 1,015 private homes on the confirmed list. Two sites from this list were released for sale by tender on 15 April.  The Lentor Central site is earmarked for a 172- unit private residential development with commercial space on the first storey, while the Tampines Street 62 parcel is slated for a 605-unit executive condominium (EC). Tender for the two land parcels will close at noon on July 22.

It is widely expected that the somewhat limited land supply from the government would rekindle the en bloc sale of older private developments that are ripe for redevelopment. However, as developers are wary of increased risks due to the 25 per cent Additional Buyer Stamp Duty (ABSD), they are likely to be careful in their offers by factoring in a greater margin of safety. Small to medium-sized developments with less than 200 units might have a better chance to succeed as they can be organised for sale more easily and the absolute land price would be more palatable to developers.