Don't get too excited about Land Use plans, warns analyst

Remember that they span up to 2030.

According to Knight Frank, following the release of the Population White Paper, the government has released a Land Use Plan paper to highlight various development strategies to support a larger population while preserving a high quality living environment for all Singaporeans.

In terms of potential impact arising from the government’s Land Use Plans, the firm foresees areas that are situated near to the growth areas (e.g. Jurong Gateway, Southern Waterfront City) would benefit from the upcoming significant investments in infrastructure. 

Those areas that are located near to the major regional commercial centres outside the city are also likely to benefit where more amenities are expected.

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However, this would take time to achieve as these plans span up to year 2030.

For instance, when the government first announced plans for Jurong Lake District, there was much buzz in the market. However, it took some years for the government to introduce detailed land use plans, sale of sites and constructing infrastructure, before the demand for residential and commercial spaces pick up and consequently property prices.

The actualisation of land use plans would also be dependent on market timing as well as the clarity in the development plan details.

To fulfil the optimisation of land use in the medium to long term, we expect the planners to be reviewing land usage in a comprehensive approach, from existing low intensity to higher intensity land use.

Given the impending investments in reclamation and infrastructure developments over the next decade or so, there would be a strain on our material and labour resources, which are increasingly a challenge for the construction industry.

Should these developments materialise according to the Land Use Plan, the possible inflation in material and labour costs would be an issue that contractors and developers would have to contend with in the near future.