Project completion period for private homes cut

The government has announced that it will cut the amount of time given to property developers to build private residential projects on state land by a year. The move was done to guarantee the availability of adequate homes in order to meet demand.

Every government land sale site comes with a project completion period (PCP), which is measured from the date the site is awarded until the time the project gets Temporary Occupation Permit. This ensures that developers complete the work within a reasonable time period.

Starting today, the PCP for private residential sale sites will be reduced from six years to five years, to guarantee more timely supply of private housing in order to meet demand.

The PCP for executive condominium (EC) sale sites will still be four years. Since projects might face unexpected construction delays, cutting the PCP for EC sites will lead to an insufficient buffer, said the URA in statement to The Business Times.

The move has been supported by market watchers, though they do not expect a major impact on the market.

Ong Choon Fah, executive director for consulting at DTZ, told BT that many developers want to build projects immediately to avoid unknown market risks and holding costs.

However, the shorter PCP will give an additional impetus to developers to finish their projects, said Ms. Ong.

Donald Han, managing director at Cushman & Wakefield, said the government made a prudent move, sending a signal to property developers to make their projects available quickly to help maintain stability in the real estate market.

Most developers are unlikely to be affected by the shorter PCP, said the URA. Based on development trends in the past eight years, the completion period for private residential sale sites reached an average of four years, it added. No private residential projects on sale sites had surpassed their stipulated PCP in 2009.