Government Further Increased Housing Land Supply In 1H 2024; Highest Confirmed List Supply In A Single GLS Programme Since 2H 2013

6 December 2023, SINGAPORE – The government has today announced its public land sales slate for the first half of 2024 (1H2024), which features the largest housing supply on the Confirmed List in a single government land sales (GLS) programme since the second half of 2013. This also is the seventh consecutive increase in the Confirmed List land supply since 1H 2021 – albeit at a slower pace compared with prior GLS programmes.

The 1H 2024 GLS programme will comprise 10 Confirmed List sites which can collectively offer 5,450 residential units (including 710 executive condo units and 515 long-stay serviced apartments) and 13,900 sq m gross floor area (GFA) of commercial space. This represents a 5.6% increase in the residential supply from 5,160 units across eight sites that were lined up under the 2H 2023 Confirmed List (Chart 1). In 2H 2023, the government had ramped up the Confirmed List land supply by 26% (half on half), after boosting supply by nearly 17% HoH in 1H 2023.

Chart 1: Number of Residential Units offered under the GLS by Confirmed/Reserve List

Source: PropNex Research, MND

The 10 sites are also the highest number of plots to be placed on the Confirmed List in a single GLS exercise since 2013. Of the 10 plots, eight are newly introduced in 1H 2024. They are in River Valley Green (Parcel A), Canberra Crescent, Jalan Loyang Besar (EC), Margaret Drive, Media Circle, Dairy Farm Walk, Tengah Garden Avenue, and a commercial and residential plot in Tampines Street 94.

As with the previous GLS programme, the government will offer a good number of prime sites in 1H 2024. In particular, half of the 10 Confirmed List sites are in the Central Region (Holland Drive, River Valley Green (Parcel A), De Souza Avenue, Margaret Drive, and Media Circle) and they collectively offer 2,390 units (44% of the total supply). In 2H 2023, four out of eight sites on the Confirmed List are in the Central Region. 

Meanwhile, the Reserve List - which comprises nine sites – can potentially offer another 3,460 dwelling units (including EC and long-stay serviced apartments), 530 hotel rooms and 93,850 sq m of commercial space. Two of the Reserve List sites – River Valley Green (Parcel B) and Bayshore Road - are new. Of note, the Bayshore Road site is the first sale of site in a new waterfront housing precinct which was recently unveiled by the government. Reserve List plots can be triggered to be launched for tender should there be market demand for them.

All in, the 1H 2024 GLS will offer 8,910 residential units, 530 hotel rooms, and 107,750 sq m GFA of commercial space across a wide spread of locations under the Confirmed and Reserve Lists.

Please attribute the comments below to Ismail Gafoor, CEO of PropNex Realty.

“The government is walking the talk; by increasing the Confirmed List land supply further – for the seventh straight GLS programme – it shows that it is determined to provide ample housing supply to cater to resilient demand and in turn, keep home prices in check.

In 2023, we note the more restrained appetite for GLS sites among developers amidst market uncertainties. With more land supply earmarked for 1H 2024, developers can be assured that there are sufficient sites to replenish their land inventory – which will also help in moderating land bids. We note that several plum sites are being offered in the 1H 2024 land supply. This will provide a good balance of homes for buyers, and offer alternatives for developers, who may otherwise have to tap the collective sale market for prime residential plots. 

That being said, we had hope that the government would place at least one more EC site on the Confirmed List, as such housing type is extremely popular with buyers, and has resulted in more aggressive bidding for EC plots in the GLS tenders. The only EC site on the 1H 2024 Confirmed List is in Jalan Loyang Besar (EC), next to Downtown East and a short distance from the Pasir Ris MRT station. 

We have seen EC land rates rising through the years (see Chart 2). In 2018, the Sumang Walk EC site set a new record land rate at $583 psf ppf, this record has since been smashed as EC land rates continued to climb. The latest record land rate stands at $721 psf ppr for the EC plot at Tampines St. 62 (Parcel B). Meanwhile, prices of new EC units have hit a fresh benchmark, with the average transacted unit price crossing $1,470 psf at Altura EC in Bukit Batok this year.

Chart 2: GLS EC land rates ($PSF PPR)

Source: PropNex Research, HDB (based on site award date)

Overall, notwithstanding the limited EC site on the Confirmed List, we think the 1H 2024 supply is quite akin to a one-stop-shop for developers, offering a good spread of sites from prime areas to the suburbs, including many plots that are within walking distance to an MRT station (new or upcoming) – an attribute that is increasingly important to many home buyers these days. Some sites are near to nature, while others have more commercial offerings nearby. All in all, we think the market will be excited about them.”

Analysis of some attractive new sites in 1H 2024 GLS

River Valley Green (Parcel A): This plot – one of the most attractive ones in 1H 2024 - is linked to the Great World MRT station on the Thomson-East Coast Line (TEL). It has a rather longish and irregular shape which will perhaps require more thinking outside the box when it comes to project design and development, compared with a more regular-shaped site. This site can yield a relatively manageable 380 units, and is a stone’s throw from the Great World City mall, and minutes from Orchard Road. The last GLS site nearby was in Irwell Bank Road (now Irwell Hill Residences) which was awarded for $583.9 million ($1,515 psf ppr) in January 2020. Another GLS site in Zion Road (Parcel A) has recently been launched for tender.     

Tengah Garden Avenue: This site can yield 860 units and it is located right next to the future Hong Kah MRT station on the Jurong Region Line which could be ready in 2027. It is the first private housing site (ex. EC) to be launched for tender in the new Tengah housing estate and will be a litmus test for private housing demand in Tengah. We anticipate keen interest among developers for this site, which also offers 3,000 sq m of commercial space.

Tampines Street 94: Another appealing site which will interest developers looking for heartland retail exposure. This plot can offer 585 residential units and 10,500 sq m of commercial space in Tampines West, which will complement other retail offerings in Tampines Central. With more housing being built in Tampines, we think the commercial space will serve the needs of a growing residential population. It is within walking distance to the Tampines West MRT station and is also near to the Bedok Reservoir Park. This plot could enjoy pent-up housing demand as there have been no GLS sites nearby for some 20 years, since the award of the Bay Water residential site along Bedok Reservoir Road in December 2000.

Margaret Drive: This site is within walking distance to the Queenstown MRT station, and is next to the Queenstown Primary School. It is the latest addition to a cluster of private housing around the Queenstown MRT station - with others being Queens Peak, Commonwealth Towers, Queens, and Stirling Residences, which is on the last GLS site awarded in that area. The Stirling Road site had attracted 13 bids and was awarded for $1 billion ($1,051 psf ppr) in May 2017. Queenstown, a city fringe neighbourhood is also popular with home buyers.

Canberra Crescent: This plot will offer 375 mass market homes. It is about 700m to 800m from the Canberra MRT station and is near a clutch of EC projects (Provence Residence, Parc Canberra, The Visionaire, and The Brownstone). The most recent GLS site awarded was in March 2020 where Canberra Drive (Parcel A) and Canberra Drive (Parcel B) were sold for $129.2 million ($644 psf ppr) and $270.2 million ($650 psf ppr) respectively.

Media Circle: The Media Circle plot is for long-stay service apartment use (515 units), unlike the Zion Road (Parcel A) and Upper Thomson Road (Parcel A) where there is a mix of residential units and long-stay serviced apartments within the development. This site, which will inject a new variety of accommodation options in the one-north R&D precinct could appeal to hospitality sector players. It could enjoy leasing demand from those working in one-north, Science Park, as well as the National University Hospital.

Dairy Farm Walk: This will be the latest site to be sold in the Dairy Farm area. It is a bit further from the Hillview MRT station compared with the previous GLS site sold – being The Botany @ Dairy Farm site which was awarded in March 2022 for $347 million ($980 psf ppr).  

Jalan Loyang Besar (EC): In view of the healthy demand for ECs, this site will draw interest from developers. It is a short distance from the Pasir Ris MRT station, near the Pasir Ris Park and next to Downtown East. There are also a few schools in its immediate surroundings, such as Hai Sing Catholic School, Casuarina Primary, Pasir Ris Crest Secondary, and Pasir Ris Primary. As such, this future EC project should be very popular with families.

Bayshore Road: This Reserve List plot is very appealing and we think it has a high chance of being triggered for sale. It is linked to the upcoming Bayshore MRT station on the TEL, homes are likely to offer unlocked views towards the East Coast Park beach and the sea, and will enjoy strong buying interest from buyers. Both developers and home buyers will be looking to gain a first-mover advantage by buying into this site, since it is the first to be sold in the new Bayshore estate.  

River Valley Green (Parcel B): Like Parcel A nearby this plot is also attractive but we do not think it will be triggered anytime soon given the oncoming supply from Parcel A as well as the plot in Zion Road (Parcel A). The site can offer 575 units (including long-stay serviced apartments). It will be linked to the Great World MRT station and has one side of the plot facing towards Kim Seng Park and the Singapore River.