By Mr. Propwise

On 14 December 2012 the Ministry of National Development (MND) announced the Government Land Sales (GLS) Programme for the first half of 2013. A total of 23 residential, two commercial, four hotel, and three mixed-use sites were announced. These sites could potentially yield a total of about 14,000 private residential units (6,900 on the confirmed and 7,100 on the reserve lists respectively), including 3,100 Executive Condominium (EC) units, and 3.4 million square feet of commercial space. The amount of supply announced is similar to that announced in 2H12, and the four GLS Programmes before that.

Large upcoming supply of residential units…

The majority of the sites are located in the Rest of Central Region and Outside Central Region, which should lead to the development of relatively more mass market sites. The URA has collated a total of 93,800 private housing units (including about 9,800 EC units) that will be constructed over the next few years, with about 43% or 40,000 of those (including 3,400 EC units) still yet to be sold.

Based on the URA data collated by, residential completions will peak in 2015 at 23,667 units based on the private residential supply pipeline, or a 47% increase over the completion expected in 2013. Despite this, the government has kept the land supply relatively constant, perhaps in an effort to prevent the perception of a squeeze in the supply of land that could lead to higher prices.

…but demand is strong as well

While the large increase in supply sounds scary, it is worth pointing out that demand has been very strong so far this year as well.

Year-to-date till November 2012 there has been an estimated total transaction volume of 37,597 units, comprising 24,970 developer and 12,627 secondary sales (Figure 1.1.5b). This is 118% of the annual average of 31,826 units. If demand going forward continues to be as strong as it has in the past couple of years then the upcoming supply could well be absorbed without any weakness in the market.

A weak November could be bad news for 2013

But if November sales are anything to go by, sales could weaken into 2013. In November 2012, the estimated total residential transaction volume was 2,278 units, comprising 1,266 developer and 1,012 secondary market sales. The total, developer and secondary market sales fell by 44%, 52% and 29% respectively on a month-on-month basis, in what is a seasonally strong period for fourth quarter property sales. The fall was partly due to a fall in new launches by developers, but the secondary market was also weak.

The supply outlook is much healthier for commercial property, with only 359 thousand square feet of space on the confirmed list, which is negligible versus the 13.2 million square feet of office and 6.7 million square feet of retail space in the pipeline.

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