The Urban Redevelopment Authority (URA) has flagged the addition of about 9,3000 new homes to the existing supply pipeline from the redevelopment of en bloc sale sites.
Analysts are not alarmed at this influx of units as they expect an inflow of overseas talents into Singapore as the economy restructures and they are likely to take up the additional supply.
The collective sales market has been active in the past year or two and about 9,300 private housing units could be generated from this process. The collective sales sites sold or awarded so far is likely to yield about 9,300 private housing units based on the land areas and allowable plot ratios under Master Plan 2014.
These 9,300 units are part of the 16,700 units that have not been granted planning approvals yet. The remaining 7,400 units are going to come from the awarded Government Land Sales (GLS) sites, including reserve-list sites which are triggered for sale but not awarded yet.
A large part of this new supply of 16,700 units could be made available for sale within the next one to two years and is likely to be completed from 2021.
This is in addition to 17,178 unsold units, uncompleted units with planning approvals at the end of Q3 2017. This includes 16,031 private homes and 1,147 EC units.
The concern over the large supply is valid, if our population continues to contract. However, as the economy restructures, there is increased demand for overseas talent, which is likely to boost demand for houses. The 16,700 unit supply from GLS and en bloc sites are sufficient to replenish the supply to meet demand. The number of unsold units in launched private residential projects (excluding ECs) is at 2,223, half of the number 4,698 unit in Q3 2016
The current 2,223 units are part of the 16,031 unsold, uncompleted private homes with planning approvals at Q3. This is higher than the 15,085 units in Q2 2017. This figure is still lower than the 31,000 units in Q3 2013, when the peak of the URA private home price index is reached. This is also below the 43,000 units at Q2 2008, during the global financial crisis.
The past 3 quarters has seen developers selling 8,702 private homes and 3,565 EC units. The potential supply of 16,700 units (including ECs) from GLS and en bloc sites is still subjected to planning approvals.
The collective sale process requires much more approvals from government agencies and Strata Titles Board. Thus, they are likely to take a longer time. Their impact to the supply is also delayed. The number of units proposed by the developer has to be subjected the approval from URA. The authorities are also concerned about the impact of the new development on traffic. The smaller units which are being built are likely to increase the traffic flow through the estate.
Adapted from: The Business Times, 28 October 2017