2 new property measures "largely positive in the long run"

Beneficial for both landowners and developers.

Prime Minister Lee Hsien Loong announced two major property measures during his National Day rally speech, namely the freeing up of 800 hectares of land in Paya Lebar Airbase for development and increased subsidies for HDB BTO buyers.

According to OSK-DMG, the positive impact for landowners comes with the migration of the Paya Lebar Airbase to Changi, which is estimated to add additional 305 ha (or 33m sqft) of residential GFA, which is similar in size with existing townships like Bukit Batok, Bukit Merah, Kallang/Whampoa and Yishun.

"Taking statistics from the HDB annual report, we use four townships of similar size and using the averages, we estimate this could potentially accommodate 62k new dwelling units (including private developments under Government Land Sales program). This is equivalent to ~186,000 people or 3 per household," the research firm said.

"Furthermore, there is also the collateral impact on surrounding areas, which could see the lifting of height restrictions, translating to higher land values for existing owners," it added.

Meanwhile for developers, the long term positive impact comes with how BTO prices are being allowed to escalate."We believe this can only support the forward price curve of the mass market/upgraders segment, allowing developers to clear their landbank without compromising on their existing margins," said OSK-DMG.

"By increasing more subsidies for first time buyers, and to extend the subsidies for bigger size flats (restriction lifted for 4-room flats), this should continue to support the appreciating BTO prices overall as the PM also stated clearly that the government does not want to see lower prices in the future," it added.