EFFECTS OF URA SOSP ON THE OFFICE MARKET

Abstract

The Sale of Sites Programme (SOSP) has been the key instrument of the Urban Redevelopment Authority (URA) in the redevelopment of the Central Area (CA) in Singapore with immense influence on the property market's supply and demand conditions. As availability of land capable for development in the CA becomes more scarce intervention via the SOSP will be even more significant. The rate at which land is released onto the market and the type of development proposed are two of the most crucial areas which needs careful study and planning. Current practice by URA has resulted in much criticism from the public regarding its effect on the stability of the market. Release of land at times when the prevailing demand can absorb the additional supply may lead to oversupply at a later date. At the same time, it might not be able to help to fulfil the current demand for space. The earlier demand for space would have been dampened by the time the space come onto the market if the construction process was lengthened. In the meanwhile, prices would have increased to undesirable levels. Whilst it is impossible and uneconomical to accurately pinpoint the exact amount of space to provide and when to do so, much can be done by the URA to ensure that the fluctuations of the property market are moderated. More sophisticated methods of projections based on econometric models coupled with greater transparency in the planning system will help to do so.