Despite the increase in land supply for new private homes in the confirmed list of the second half 2016 Government Land Sales (GLS) Programme, no new sites were released for executive condominium (EC) development.
Credit Suisse said this is the first time since the start of 2008 that no EC site was released on the confirmed list, but it didn’t come as a surprise due to oversupply concerns in the market.
In fact, 13 EC projects already launched have only sold an average of about 50 percent of units, revealed a report from the financial services company.
Separately, OrangeTee noted that there are still 4,010 unsold EC units as of end-April 2016.
In a report, the property agency said, “Assuming that the Sumang Walk EC site (released for application under the reserve list of the second half 2015 GLS Programme) is not activated, and the 15 month waiting period for developers remains unchanged, the tapering of EC land supply could lead to a dearth of EC launches in 2017 and the first half of 2018.”
Two EC projects at Choa Chu Kang Avenue 5 and Yio Chu Kang Road are expected to launch next year, while only one project at Anchorvale Crescent is set to hit the market in 2018, said OrangeTee.
In a blog post, National Development Minister Lawrence Wong said the government considered several factors in determining the land quantum for the second half of the year.
“We are mindful that excessive supply in a weak market can exacerbate a decline in prices. At the same time, insufficient supply can result in a future shortage and an unwarranted spike in housing prices when demand picks up.
“We will continue to monitor the market closely, and find the right balance to ensure sustainable housing prices and a stable property market,” added Wong.
On Wednesday (8 June), the government launched four sites for sale under the confirmed list for the second half of 2016, and an additional 11 sites on the reserve list. This could yield up to 7,550 residential units, compared to the 7,420 units in the first half of the year.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email firstname.lastname@example.org