An aerial view of Rio Casa, a 286-unit development at Hougang Avenue 7. (Photo: Knight Frank Singapore)
Collective sales have surged from around 600 units for the whole of 2016 to about 2,700 existing private homes so far this year, revealed the Ministry of National Development (MND) during a parliamentary session on Monday (6 November).
MND thinks that the strong sales growth is due to two primary factors.
“First, more developers are keen to replenish their land banks. There has been a healthy increase in the sales of new units in the first three quarters of the year, which in turn means that the unsold supply in the pipeline has come down. To illustrate, there are about 17,200 units as at Q3 2017, down from about 40,000 units in 2012. “
“Second, successful en-bloc sales in 2016 may have encouraged more owners of ageing residential projects to initiate the en-bloc sale process this year to monetise their assets.”
These are MND’s responses to the queries of MP for Nee Soon GRC Dr Lim Wee Kiak regarding the main driving forces for the recent spike in en bloc sales.
He also asked if whether there is a need to increase the number of residential sites offered under the Government Land Sales (GLS) programme, and what is the effect of the robust en bloc sales on the property market’s outlook over the next six months.
In reply, the MND said that the en-bloc residential sites sold since last year are expected to be launched for sale in the next one to two years. And these upcoming units and other key factors like population and income growth as well as prevailing market conditions will be taken into account before deciding the number of state land to be made available for sale.
Specifically, it noted that the GLS programme is updated on a half-yearly basis, with Confirmed List sites designated to be released for sale within the next six months, while Reserve List plots will be triggered for sale once a developer has committed to a minimum bid price. This implies that the latter will only be purchased by home builders if they feel that there exists underlying demand.
The authorities will also continue to closely monitor market trends and take necessary actions to ensure that the property sector is stable and sustainable, said the MND, adding that the details of 1H 2018 GLS programme will be announced by year-end.
This article was edited by Keshia Faculin.