Photo of Lawrence Wong from Ngau Kai Yan CNA

According to the Government Land Sales (GLS) programme for the first half of 2017, the Singapore government will reserve more land for the construction of private condominiums.

In its media statement, the Ministry of National Development (MND) wrote that more private condominiums are needed to accommodate the increased demand from the rich:

“The five residential sites on the confirmed list can yield 2,330 private homes, which is higher than the supply of 2,170 units from the confirmed list in the second half of this year. The demand for new housing has remained healthy in 2016. The continued supply of residential sites through the GLS programme will ensure that there is a steady pipeline of new private housing units to meet the needs of our resident population.”

However, MND’s assertion is in contrary to market sentiments as private homes sales in Singapore touches an 4-year low in 2016. Just yesterday (Dec 14), the Urban Redevelopment Authority (URA) published statistics revealing that private home sales is still in a slump with drastic hiccups of a reported 31.4% month-to-month decline in November. Demand of Singapore private properties has been significantly weakened by property cooling measures that raised stamp duties for foreigners. Property developers in response have been cutting back on sales launches and new developments because of the low demand.

The increase in land sales will likely create an oversupply on private home sales, while public HDB homes remain under-supplied. In a blog post by MND Minister Lawrence Wong last week, the Minister said that he will cut HDB home supply to only 17,000 in 2017, from 18,000 in 2016.

Read: HDB housing under-supplied up to 6 times in demand

In the most recent HDB BTO sales launch last month (Nov 2016), the BTO flats for Kallang was oversubscribed by 4.3 times, with 675 applications for only 158 vacancies. Overall, for apartments of 3-rooms and above, there is a 1.2 times oversubscription, at 4,455 application demand for 3,581 vacancy units.