Singapore Property | On the newly released GLS or government land sales program by the Ministry of National Development (MND) on Thursday (June 6), the government announced the list of five confirmed and eight reserve sites that could accommodate around 6,430 private homes, 92,000 square meter total of floor area of commercial space and 1,100 of hotel rooms.
Together with the announcement of MND is to regulate and reduce the supply of housing by 15% of its current supply which could mean from 2,025 units it will be trimmed to 1,715 units only. This decision had come up due to reports of the fall back of housing demands. Based on the reports, there are still around 24,000 existing houses remain unoccupied. The said fallback is due to the government’s cooling measures on the property market.
With this government’s regulation, how would it affect the homebuyers or the market in general? What could be the possible consequences to expect?
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There are possible consequences that homebuyers may expect. First, is the possible stability on the selling prices of the housing unit. The trimming of supply could mean equalization between supply and demand in the housing market at large. The cutback may not be felt this early as there are still numerous vacant private housing to be sold out, therefore, freezing of prize is of high probability.
Secondly, a smaller site for developers which constrains the developers to limit on developing residential sites which actually favors them if cooling measures is to be taken into consideration. Since it is stated in the latest property market cooling measures, residential developers will pay 25% ABSD, way higher to previous 15%, if after 5 years of site acquisition they fail to develop and sell off all the units.
Lastly, is the possible swell in the number of more affordable and reasonable housing units for first-time buyers and HDB upgraders. Demand on the executive condominium is anticipated to increase from the developers as well.