Property consultants say the government looks to be trying to prevent prices in the residential mass market from rising too sharply by putting 8 suburban sites on the Confirmed List for its Government Land Sales (GLS) Programme for the next 6 months.
They do not expect to see fierce bidding for these sites, although they say there is niche appeal. Mass market properties are expected to provide most of the momentum in the residential sector next year, replacing the influence high-end properties have had in 2007.
And in anticipation, the government is releasing eight suburban sites on the Confirmed List for its land sales programme in the first half of 2008.
Donald Han, Managing Director, Cushman & Wakefield, says: "The government's overall plan has been to ensure adequate supply on the mass market and HDB part of the equation. Over the last 12, 24 months we see huge increases due to lack of supply coming from luxury and mid-end market. Looking at trends the government is concerned to ensure that prices for mass market don't get out of sync."
Nicholas Mak, Director - Consultancy and Research, Knight Frank, says: "The government has always said that there's sufficient demand in the market and I think right now they're pushing out more HDB flats as well as mass market private property sites. It's basically to cater to the expected build up in demand. I guess we have really seen quite a good runup in high end market as well as the mid-tier. I think the mass market pick up this year and next year, I think it will be a gradual matter and what is going to be made available in both the HDB market and this GLS is actually to cater to that expected increase in home buyers demand."
But analysts say they don't expect bidding for these sites to be fierce because developers are seen to have had their fill in the en bloc frenzy this year.
They've been building up a land bank with purchases in the prime districts of 9,10 and 11, as well as in districts 4, 5 and 15.
Nicholas Mak says: "The GLS sites, many of them are outside the districts that I just mentioned, they will cater to some developers who may want a more diversified portfolio and also to cater to HDB upgraders. But having said that, I think some of the developers are not really that hungry anymore. They've already bought quite a number of sites. And they will probably be turning their attention to developing and marketing these sites."
Still, the eight sites on the Confirmed List are expected to hold their ground.
Donald Han says: "Not many successful en bloc really transpired in suburban area. There's a niche where government comes in to offer sites in the non-traditional collective en bloc areas. And I think that's where the intention is to ensure adequate supply into the market. Moving forward we'll see developers having more choices."
Among the eight sites, analysts say the hottest ones are those in Sembawang and Toa Payoh. - CNA/ch
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