Prime sites may yield high-demand homes

Should the sites currently earmarked for future residential use be put up for sale, the public can expect some juicy baits from developers as these sites are in prime locations near the city centre.

Tanglin ResidencesThe 2 sites which are particularly beguiling are the former Ministry of Home Affairs Phoenix Park site in Tanglin road and the former Overseas Family School plot in Paterson road. Both sites are under governmental ownership and while the location of these sites will excite developers and buyers alike, the government is unlikely to put them up for sale anytime soon. They have in fact been holding back on the release of land sites possibly contributing to the increased number of successful en bloc sales in recent months.

Paterson SuitesThese sites with their exclusive addresses are currently put up for interim use though should they eventually be placed for sale, they are likely to yield 450 to 700 homes in the Paterson road site and 850 to 1000 units averaging 800 to 1,000 sq ft on the Phoenix Park site. The latter is currently tenanted by LHN Facilities Management who will have the option of renewing till the end of 2020. The proximity of this site to various embassies in the Tanglin area will however mean restrictions may be placed on the height not to mention possible heritage conservation regulations.

 

2.11-hectare residential site in Queenstown up for sale

With a $685 million bid, sales of a new residential land site in Queenstown has been triggered. The reduction in land sales under the Government Land Sales programme has seen older properties more keen to go on the en bloc sales route, and developers have shown their eagerness in procuring land sites as market sentiment continues to improve.

queenspeak2This latest land site is a 2.11 hectare plot on Stirling Road with the propensity to yield 1,110 new private home units. This site was placed under the Urban Redevelopment Authority’s reserve list in 2010 which means it will only go on sale should the Government receive a bid of an acceptable level. The size of the plot can be credited to the combination of 2 adjacent sites which were merged into 1 in 2012. The 99-year leasehold site is near Anchorpoint Shopping Centre, Ikea, Queensway shopping centre and just a few stops way from the Bukit Merah bus interchange and Redhill and Queenstown MRT stations.

As the site is within walkable distance from Queenstown MRT station, property analysts anticipate competitive bidding this time round. The maximum floor area of the site comes up to 954,328 sq ft or approximately $718 psf though joint ventures for a land plot this size seems likely and bids are expected to vary from $838 to $950 psf.

Commonwealth TowersThe site is expected to receive from between 7 to 11 bids. Nearby properties which could set the precedent for pricing are the Commonwealth Towers and Queens Peak condominiums. Current prices at both developments stand at $1,654 and $1, 640 psf respectively. Projects in the vicinity have been selling well, especially with the recent lifting of the property curbs and a general lift in consumer sentiment.

Winning $292 million West Coast Vale land sales bid

Properties in West Coast have been garnering tons of interest lately. One of the latest offerings in the area is the Parc Riviera condominium, and nearby the Clement Canopy also recently launched last weekend.

parcriviera3Thus a winning bid of $292 million for a 99-year leasehold site in West Coast Vale probably did not come as a surprise. The bid was won by China Construction Development, with 8 other bidders vying for the same site. Second in line was MCC Land (Singapore) with a bid of $289.9 million. The affordable quantum was likely what drew the bidders as the plot was one of the last to be offered up for tender last year under the Government Land Sales Programme. The site was launched on December 7.

Considering the final bidding price of $592 psf is 7.4 per cent higher than the $551 psf paid for the neighbouring Parc Riviera project, the developers must be optimistic about the prospects of the property market. Parc Riviera is closer to the Ayer Rajah Expressway though the proximity of the Jurong Lake District and malls such as Jem will help in marketing the property to potential buyers.

parcriviera2Developers have been seen to be more aggressively bidding for land plots in recent tenders as most are hoping to replenish their land banks and preparing for better times ahead as the property market is seen to be bottoming out.

Prime land plots released for H1 of 2017

Out of the 5 residential sites which were released under the Government Land Sales (GLS) scheme‘s confirmed list for H1 of 2017 are 3 sites which may see heated competition from bidders – one on Jiak Kim Street where the Zouk nightclub used to stand, another on Fourth Avenue right next to the Sixth Avenue MRT station and yet another on Woodleigh Lane, near the new Bidadari township and Woodleigh MRT station.

rmaisonThese 5 sites are expected to yield up to 2,330 new homes, about 50% more than the 1,560 units yielded by land released in the first half of this year. Bidding on the last few sites released this year have gotten developers and property analysts excited about the potential volume and size of land plots to be released next year, but the authorities have kept it conservative thus far, having released only 10 sites on the reserve list. This includes 1 mixed-use site and 2 commercial sites.

It is possible that the Government is concerned about the stock of unsold executive condominiums (EC) currently in the market. In addition, most of the units sold this year were purchased by investors and not true home-occupiers. The Monetary Authority of Singapore has also recently flagged their concern about rising vacancy rates in the private property market. This combination of factors may have influenced their decision on how much land supply to release in 2017. Only 1 EC site was released on the confirmed list and another on the reserved list.

2017 to welcome more land supply

Recent tenders on land plots have received more than positive responses from developers, plus the inventory of unsold units have diminished. This may mean the authorities are likely to release more sites in 2017 to replenish land supply.

fd1a3ab7647f44a684a37926cd526cb6The government held back on land sales in the earlier part of 2016 when unsold stock ballooned. But as buyers slowly returned to the market, investors picked up bulk sales and developers closed en bloc deals, competition for available land have been obviously heating up in the past months. If land supply continues to diminish, developers may be forced to bid even more aggressively and thus push up private property prices, in particular in the executive condominium (EC) market.

Some of the highest-bid land sites this year included a Martin Place plot which went to First Bedok Land for $595.10 million, and a mixed residential and commercial plot with a winning bid of $301.16 million by Qingian Realty. A white site on Central Boulevard was also sold to Wealthy Link for $2,568.89 million in November. There were 11 sites on the Urban Redevelopment Authority’s (URA) reserve list in H2 of 2016, with possibly up to 15 more added to the list by H1 of 2017.

The Ministry of National Development (MND) will however be more selective about where the new sites will be released, likely avoiding areas where large amounts of unsold inventory remain such as Redhill and Commonwealth.

Sengkang properties beginning to shine more clearly

Gone is the decade when Punggol and Sengkang were considered too far flung or unpopulated sans amenities.

HighparkResidencesIf the popularity of latest offering in Fernvale, High Park Residences and other completed private condominiums were anything to go by, more similar properties might spring up in the midst as district 19 continues in its expansion and development. Other private residential developments in the Sengkang area include H20 Residences, Riverbank@Fernvale and Rivertrees Residences. More young couples and extended families are moving into the district and with the average selling price holding steady at $1,060 psf, the private properties here are a more affordable for those crossing over from public housing.

Rivertrees Residences3 new land banks will be put up for tender by the Urban Redevelopment Authority (URA) in the upcoming months, and there may be strong bids coming from developers and consumers may very well have more than sufficient options to choose from soon. One of the sites most likely to gain interest will be the 99-year leasehold residential site on Fernvale road with a site area of 17,196 sq m. The nearby 1,390-unit High Park Residences with a median selling price of $989 psf has already sold almost all of its units within a year of its launch in July 2015.

The proximity of this site to amenities such as Seletar Mall and the stretch of eateries along Jalan Kayu, the Thanggam LRT station and Tampines Expressway (TPE) and schools will no doubt urge developers to seriously consider its potential.

 

 

West Coast soon abuzz with new properties?

Without question, the west coast has a vibe of its own. A sense of excitement, freedom; a buzzing undercurrent of work and play. So the government’s recent release of a 16, 378 sq m land site on West Coast Vale could potentially mean an even more vibrant district in as soon as half a decade’s time.

AYEPhoto credit: LTA

The plot of land released for sale is under the government’s reserve list, which also means the sale will only go through if the bids meet the minimum set by the government. With its prime location near the Ayer Rajah Expressway and West Coast Highway, and schools such as Nan Hua Primary School, The Japanese School and Commonwealth Secondary School, the area is ripe for a new residential condominium or strata landed housing project.

The neighbouring Parc Riveria may be a good gauge of the potential this new site holds. The land which Parc Riveria stands on was acquired only last year and another private condominium nearby is The Trilinq.

The TrilinqThe government has been more cautious of late with the  release of land for sale under the government land sales programme as the market is becoming more saturated. What may hold developers back from bidding for this site is its distance from MRT stations and other amenities. It may however mean quieter and more exclusive environments which young couples or families looking for a property near schools in its vicinity.

Tri-factor sustaining Property market – Government, industry and home owners

As 2016 brings a slew of completed new homes into the property market, developers are concerned about what market restrictions and rising construction and project development costs will do to the industry.

Kallang Riverside

Photo: Kallang Riverside

Even as everyone understands that Singapore is a land-scarce country, and the costs of properties will never be unrealistically low, the current market sentiment seems to be one of wait-and-see. But property prices may never fall too far without affecting the quality of homes. Developers are already feeling the financial squeeze as land costs rise, along with regulatory fees for plans submissions and costs of construction, fittings and furnishings. On top of that, developers are also under the time pressure of selling all their units within a five-year period in order to avoid paying the Additional Buyers’ Stamp Duty. At the moment 3,000 units from the development of properties from land plots sold under the Government Land Sales Programme in 2012 remain unsold, they will reach their five-year deadline next year.

Thus as much as a home buyers may be waiting for even lower prices, new properties launched in the months or year ahead may not be able to lower their prices any further. Moving ahead, how the Government manages its land sales programme, and how developers manoeuvre around rising project development costs and market their products may be key to keeping the industry and ultimately the overall economy healthy and growing.