Week in Review – 23 October 2014

Reduction in public and private property supply in 2015, Luxury residential properties experience slow sales, Jurong Lake Gardens development plans
Reduction in public and private property supply in 2015
The Government has decided to reduce the supply of Build-To-Order (BTO) flats and private land sales to avoid a glut in the housing market. In 2015, the number of BTO flat launches will be reduced by 25 per cent to approximately 16,000 flats. In addition, BTO exercises will occur once a quarter instead of bi-monthly. Real estate analysts who spoke to Channel NewsAsia believe this will most likely not affect the resale market since the applications for BTO flats have fallen. In an interview with Today, Mr Tan Kok Keong, Chief Executive of REMS Advisors said that the stabilised BTO application rates show that pent-up demand has been met.
Mr Khaw Boon Wan, Minister for National Development, announced during an interview on Channel 8’s Hello Singapore programme, that the number of land sites offered under the Government Land Sales (GLS) programme would be reduced as well. Mr Khaw said, “The (HDB and private property) markets are linked. So, just as we need to reduce BTO, we have also been progressively bringing down the Urban Redevelopment Authority land sales for executive condominiums, for private condos. So this year, we made a small adjustment of reduction. Next year, we will go a bit further.” On the reduction of GLS sites, Mr Tan said to Today, “I don’t think it will lead to developers bidding more aggressively, because it is well documented that market participants expect a build-up in supply in 2015 and 2016, so developers will be wary of that and bid at a level that they think they can sell.” 
Mr Ku Swee Yong, Chief Executive of Century 21, expressed concerns over an increase in private property prices due to the reduction in supply to TODAY.  He commented, “The GLS programme is actually a good tool to keep prices in check for the long-term stability of the market. If developers know there won’t be as many sites on offer, it may push up land prices and this cost will be passed on to consumers.” Mr Khaw added that cooling measures would not be changed any time soon as property prices can only be moderated further since income levels have only grown at 30 per cent thus far. He said, “Cooling measures are something we will have to relook sooner or later, but I think now is not the time yet … Prices have come down, the market is turning into a buyer’s market and sellers now have to be more realistic”.
Luxury residential properties experience slow sales
Sales of luxury residential properties have fallen as seen from recently launched property projects. According to Knight Frank Consultancy, only one unit was sold in M5, Tanglin Planning Area; One Duchess in Bukit Timah sold only two out of its 13 units. A report by OSK-DMG revealed that the sluggish luxury residential sales – accounting for six percent of September sales – pale in comparison to the improving sales in the mid- and mass market segments. In a move to clear remaining units, developers have marked down prices for luxury condominiums such as The Vermont At Cairnhill and The Panorama at Upper Thomson. Remaining units at The Vermont were sold at around $2,110 psf, about 13 per cent lower than its initial price and 60 units at The Panorama were sold at $1,240 per square foot (psf), almost ten percent lower from its initial price at $1,350 psf. 
Jurong Lake Gardens development plans
The development of the new Jurong Lake Gardens and its surrounding areas will be led by Lawrence Wong, Culture, Community and Youth Minister. A steering committee comprising members from the government, private sector and community has been set up to “look at all the options and gather ideas and feedback before the plans are finalised” says Tharman Shanmugaratnam, Deputy Prime Minister to Channel NewsAsia. For instance, the Japanese Garden, Chinese Garden and Jurong Lake Park will be merged into the Jurong Lake Gardens. In early 2015, the National Parks Board will seek fresh ideas from the public, which will be added to the masterplan competition for the Jurong Lake Gardens.