Private housing land supply in 2H to yield 5,050 units, full-year supply reaches 11-year high

The Government Land Sales (GLS) programme for the second half of this year (2H 2024) will release 10 Confirmed List sites, yielding an estimated 5,050 private residential units. Together with the supply from the first half, total private housing supply for the full year will reach 11,110 units—the highest level since 2013.

However, the number of private residential units yielded in this round of GLS sites is 7% lower than in the first half, marking the first half-on-half decline since 1H 2021. Analysts suggest this is likely due to lukewarm developer participation in recent land tenders, prompting the government to moderate the pace of land sales.

In a press release, the Ministry of National Development (MND) announced that in addition to the 10 Confirmed List sites, nine Reserve List sites will also be rolled out in 2H 2024. Across all sites, they can yield approximately 8,140 private residential units, 113,650 square metres of commercial space, and 530 hotel rooms.

The authorities noted that with the steady increase in GLS supply over the past two years, the momentum of private home price growth has moderated. To continue meeting housing demand and safeguarding market stability, the government is rolling out a supply level on par with that of the first half.

Looking at the full year, the launched sites are spread across various locations, offering diverse housing typologies to meet different needs. In addition, the nine sites on the Reserve List remain available to cater to developers' supplementary demand.

The Confirmed List comprises nine private residential sites (including one Executive Condominium (EC) site) and one commercial and residential site.

Meanwhile, the Reserve List includes five private residential sites (including two EC sites), one commercial site, two White sites, and one hotel site.

Reduced Supply Helps Prevent Market Oversaturation

Addressing the half-on-half dip in GLS supply, softer private home sales and heightened development risks have dampened developer participation in recent land tenders, leading the government to calibrate the pace of supply.

In the GLS tenders that closed last Wednesday (19 June), two private residential sites met with a lukewarm response. The Upper Thomson Road (Parcel A) site drew zero bids, marking the first time in at least 20 years that a GLS site saw no takers. Meanwhile, the River Valley Green (Parcel A) site attracted only two bids, with the top bid coming in 12.5% below the land price fetched by the nearby Irwell Hill Residences site.

Two months earlier, GLS tenders for the Zion Road (Parcel A) and Upper Thomson Road (Parcel B) sites also drew only a single bid each.

The number of unsold private residential units held by developers climbed from 16,929 units in 4Q last year to 19,936 units recently, representing an 18% increase quarter-on-quarter. As overall transaction volumes moderate, developers' appetite for land has also cooled. Tapering the GLS supply will help ensure a balanced pipeline and prevent the market from becoming oversaturated.

Sustained, adequate land supply, coupled with the three rounds of property cooling measures implemented since December 2021, will support the stability of the private residential market. Notably, six of the 10 Confirmed List sites are situated near MRT stations, which will likely make them preferred choices for homebuyers.

One of the Confirmed List sites rolled out for the second half is located at Chuan Grove, near Lorong Chuan MRT station, which analysts expect to attract strong buyer interest.

Nonetheless, ramping up private housing supply can carry risks—plentiful options could lead developers to cherry-pick high-margin parcels while leaving less appealing sites completely overlooked.