Impact of new sites won’t be felt yet

Source : Sunday Times – 15 Nov 2009

Sites for tender will yield 2,925 units but they won’t be ready for at least 1.5 years

The Government came out about a week ago to say that there is no shortage of residential supply and thus no need for buyers to rush. That was when it announced its decision to tender out eight residential sites for sale in the first half of next year.

The eight sites are in non-city areas such as Choa Chu Kang, Simei and Tampines.

It also has a long reserve list of residential sites that are available for sale, if developers are to show interest by committing to a minimum bid the Government finds acceptable.

This potential supply comes from the twice-yearly government land sales programme and means buyers will have more choices while property owners may benefit.

HDB upgraders in particular will be glad to know that the latest sales programme – for the first half of next year – will see a slew of suburban residential sites.

Property owners who live near the eight sites can expect to see a new project in their neighbourhood in the next few years.

If the economy improves steadily, they can even look forward to a rise in their home values when the new project is released for sale.

‘Generally, when a new project is launched, it will have a bearing on the developments in the vicinity,’ said Colliers International’s research and advisory director, Ms Tay Huey Ying.

‘If a project is launched at bullish price levels, it could push up the prices of surrounding developments, though a lot can depend on project attributes.’

Ngee Ann Polytechnic lecturer Nicholas Mak said: ‘In a buoyant market, developers would launch at a higher price on a per sq ft basis than surrounding projects. In a less buoyant market, the premium would be smaller.

‘The launch price does give some support to the asking prices of individual sellers in the area.’

In January, three sites will be put up for sale, including two executive condominium (EC) sites.

The first EC site in Buangkok Drive, near The Quartz condo and Buangkok MRT station, can accommodate an estimated 520 units while the second in Yishun Avenue 11, next to the Lilydale EC, can take 385 units.

The EC scheme was launched in 1996 to help Singaporeans who could afford more than new HDB flats yet found the prices of private housing too high.

The biggest of the eight sites is at the junction of Tampines Avenue 1 and Avenue 10, next to The Tropica condo and Bedok Reservoir. It can take 605 units.

The site in Choa Chu Kang Road, suitable for 200 units, sits above the Bukit Panjang LRT Depot and Ten Mile Junction, and is near the future Bukit Panjang MRT station.

The Sembawang Road site is near Sembawang Shopping Centre and can take about 290 units.

In the west, the Boon Lay Way site for 525 units is next to the sold-out The Caspian and near Lakeside MRT station.

Property consultants also singled out the site at Simei Street 3 and the one at the junction of Upper Serangoon Road and Pheng Geck Avenue as choice ones because of their proximity to the Simei and Potong Pasir MRT stations respectively.

‘As Singapore becomes more populated, characterised by a relatively fast-paced lifestyle, accessibility and proximity to mass transit stations will be a key consideration for future home buyers,’ said CBRE Research director Leonard Tay.

On the reserve list, there are also sites near MRT stations: The Bartley Road site, which can take about 500 units, faces Bartley MRT station and the Stirling Road site, which can have 405 units, is near Queenstown MRT station.

Both sites are seen as highly attractive and thus likely to be triggered for sale next year. Even if they are not, the eight sites to be tendered out next year will yield 2,925 units, which is nearly as high as the 3,000 units put out in the se-cond half of 2007.

In addition to the reserve list sites, the Government is making available 10,550 private residential units – the largest supply since the second half of 2001.

Still, the impact of this will not be felt immediately.

It will take at least 1.5 years before a project on the eight sites can be launched, said Mr Mak.

And depending on how the market pans out, developers may choose to launch their projects later, he said.