New GLS focuses on residential housing

The prices of mass market homes remain firm, with analysts offering a positive outlook for 2021.

Residential land is the main focus in the announced Government Land Sales (GLS) programme of the Urban Redevelopment Authority for the first half of 2021.

According to Christine Li, head of research at Cushman and Wakefield, the GLS program for H1 2021 saw a slight uptick in the total number of private residential units as compared to GLS programme for 2H 2020.

“The number of private residential units on the Confirmed List and Reserve List rose by 6% in total, although the increase of one more site on the confirmed list is welcomed because of the current positive market sentiment,” Li added.

Desmond Sim of CBRE commented that the increase in residential units introduced will help to provide a much-needed boost for developers to shore up their land inventory, given that supply from previous GLS sites has been relatively limited.

According to Wong Siew Ying of PropNex, the upcoming GLS H1 2021, whilst prudent, is also responsive to the underlying housing demand – providing more residential units on both the Confirmed and Reserve Lists this time compared to the GLS 2H 2020.

The release sites contain four confirmed list sites and nine reserve lists that the URA said to yield about 7,045 private residential units, 101,200 sqm gross floor area (GFA) of commercial space and 1,070 hotel rooms.

The government said because of economic and market uncertainties, it has moderated the private residential units on the confirmed list, which Sim and Li said is a calibrated approach by the government.

Sim said the GLS programme is retrospective for the future needs of developers and at the same time provides new development nodes which may develop from future infrastructure completions like the Lentor Central site which is next to the upcoming Lentor MRT station on the Thomson-East Coast Line.

Overall, after nine rounds of cooling measures, the property market is still experiencing robust residential sales this year, Li said.

“For the whole of 2020, developers are expected to sell about 9,500 units, which is just a tad lower than the 9,912 units transacted in 2019 despite the challenging economic situation,” she added.

Wong said PropNex sees a keen demand for development sites outside central region, seen by the strong land bids for the Tanah Merah Kechil Link and Yishun Avenue 9 in the recent GLS tender.

We think there is room for the government to perhaps add at least another OCR site to the 1H 2021 GLS Confirmed List. Our analysis of the supply and demand patterns suggests that there is a greater imbalance in the OCR where a larger demand pool has helped to absorb supply in the mass market. Given the tight supply in the OCR, it is likely that prices of mass market homes will remain firm,” Wong added.