Speech by Minister Desmond Lee at REDAS Spring Festival Lunch 2025
Feb 7, 2025
Introduction
A very happy Chinese New Year!
The Year of the Snake embodies wisdom and transformation – qualities that reflect the real estate sector’s leadership and drive towards innovation. This is all the more important because we look forward to a good year, but we are also mindful that this year we must keep an eye on the geo-political situation, and its impact that it may have on all of us in Singapore. As we gather here to celebrate the new year, let me share what we have achieved together in the past year, and the opportunities ahead for our sector.
Housing Market Outlook
Let me start off with the housing market outlook. Over the last few years, we faced significant challenges in the property market. The pandemic disrupted construction, delaying projects and lengthening waiting times for home buyers. At the same time, changes in social norms and demographics saw more Singaporeans wanting their own living space, raising the demand for housing. The strong, broad-based demand coupled with tightness in supply, had contributed to the rise in housing prices.
We have worked to address the demand-supply imbalance by working closely with the real estate sector, to ramp-up housing supply. In 2024, we released land for around 11,000 private housing units under the GLS Confirmed List, which is the highest in a single year since 2013. We will also exceed our earlier target to launch 100,000 BTO flats from 2021 to 2025.
With the large injection of supply, the private property market as well as BTO application rates have shown signs of stabilising. In fact, BTO application rates today are lower than before the pandemic. The private residential price index increased at a slower pace of 3.9% last year, compared to the increase of 6.8% the year before and 8.6% in 2022. And as I said before, first-timer application rates have also moderated on the BTO front from 3.7 in 2019, to 2.1 in 2024. In addition, we see the rental market stabilisting, with private housing rents decreasing by 1.9% in 2024, the first decline since 2020.
Now in 2025, we will continue to ramp up supply on the HDB front, with 19,600 BTO flats and 5,500 Balance Flats planned for launch. So, in total, more than 25,000 new BTO homes and Balance Flat homes. As well as around 8,500 units released under the 1H 2025 GLS programme. Apart from housing units, there will also be sites for long-stay Serviced Apartments, which were introduced more recently to help meet rental demand and add more diversity to the range of products available. I encourage you to participate in the tenders for these sites, to bring new products to our rental landscape.
Shaping a Vibrant and Inclusive City
Besides housing, we will also focus on rejuvenation efforts. We say the Spring Festival is time for renewal, a time for spring, blossoming, for new things and for rejuvenation. The same goes for our city, including the Central Business District or CBD. As our city centre continues to evolve from a predominantly office area into a live-work-play precinct, the contributions from the real estate sector have been significant. For instance, the Anson-Tanjong Pagar area, already located close to existing residences and amenities on the fringe of our CBD, is transforming into a lively urban neighbourhood that taps on the draw of working and living downtown, with many projects starting to take shape. In fact, one of them is Keppel South Central, an effort undertaken by Keppel where the former Keppel Towers is redeveloped into an energy-efficient commercial development. Another is One Bernam, developed by MCC Land, which is set to introduce new residential units and retail options to the neighbourhood.
Two important policies that have enabled our city centre to rejuvenate are the Central Business District Incentive (CBDI) and Strategic Development Incentive (SDI). These two schemes were introduced in November 2019. The CBD Incentive Scheme encourages existing older office buildings in certain areas of the CBD to be converted into mixed-use developments, to inject more homes, a larger live-in population, and greater mix of uses to revitalise the CBD. I know many of you work in the CBD, and after office hours when you go on the road and around, it is quite quiet. The Strategic Development Incentive or SDI encourages the redevelopment of older developments in strategic areas to drive transformative changes to the surrounding urban environment. Both schemes have been well-received and most of the 17 CBDI and 12 SDI proposals have been granted in-principle approval. 4 CBDI projects in the Anson-Tanjong Pagar neighbourhood are undergoing construction as we speak. These projects, Newport Plaza, The Skywaters, 15 Hoe Chiang Road and 51 Anson Road, are progressing steadily. With the completion of all these projects in the coming years, the Anson-Tanjong Pagar area will be transformed into a vibrant mixed-use urban neighbourhood with more than 1,000 new homes, hotels, shops and eateries, as well as new public spaces and more active street fronts. These developments are set to provide more opportunities for us to redefine the way we live, work and play in the heart of our CBD. I would like to thank our developers and stakeholders who have submitted thoughtful proposals, and who continue to explore more opportunities to reimagine and revitalise our first CBD.
Today, I would like to take this opportunity to announce that we have completed our review, and will be extending both schemes for another 5 years.
We will also be making some refinements and changes to the schemes to ensure that they continue to support Singapore’s strategic objectives and remain relevant to our industry. Let me sketch this out.
Extension of Commercial Use option under CBDI
First, most office developments in the Tanjong Pagar, Robinson Road and Shenton Way areas today can retain their existing Commercial Use zoning under the CBDI scheme, so long as they convert a significant portion of their office space to non-Commercial uses. In our industry engagements, in our conversations with many of you, we have shared with us feedback that extending this option to the CBDI areas of Anson and Cecil could improve the attractiveness of the scheme.
Having studied your suggestions as well as looked at market trends, we will provide more flexibility to developers and property owners to consider a wider range of options. CBDI proposals in Anson and Cecil will have the option to retain the Commercial use if Long-stay Serviced Apartments are provided. This will introduce more options for people who want to live near their workplaces and amenities in the city centre.
Strengthening Environmental Sustainability
Second, we know that environmental sustainability in the real estate sector is growing in importance. Many of you put that into your work cycles, and make that a focal area for your projects, and we see that environmental issues are becoming more seized in the minds of the public.
While we support revitalisation and rejuvenation through redevelopment, what we do not want is wasteful demolition and excessive rebuilding, especially if the buildings are relatively young, or still in good shape. It is to strike a balance, so not to swing from one extreme to the other. Existing buildings are made up of precious resources and embodied carbon. Tearing down buildings prematurely – especially if they are young buildings, would therefore not only waste valuable resources, but also generates significant carbon emissions through the demolition and rebuilding process. Instead, we should consider working as well, towards rejuvenating sensitively with sustainability in mind.
Our CBDI and SDI schemes already reflect this approach to some extent. For instance, the existing development must be at least 20 years old, to be eligible for either scheme. CBDI and SDI proposals must also attain minimum Green Mark (GM) Platinum Super Low Energy with Whole Life Carbon and Maintainability Badges.
We can take this one step further. Under the updated schemes, redevelopment proposals will need to meet new sustainability requirements. We will require all CDBI and SDI applications to include a Sustainability Statement that assesses the feasibility of retrofitting part or all of the existing building. So we want to strike a balance, you can redevelop, but we also like you to consider whether there other options in mind. URA, BCA and relevant agencies will look at the Sustainability Statement. An additional carbon optioneering assessment weighing the trade-offs of different development scenarios may also be required for planning approval.
This means that in order to qualify for the incentives, our developers and building owners will now need to also consider ways to reduce the environmental impact of redevelopment. We know that meeting our net zero target goals for Singapore and the whole world means that every sector must play their part, and the key is to strike a balance. And in our sector, between a brand new redevelopment and retrofitting and enhancement. My colleagues at URA will be issuing an industry circular to provide more details on the revisions to the SDI and CBDI schemes, and we look forward to your continued support.
Enhancing Regulatory Agility
Transforming Processes
Finally, let me talk about some of the transformations in our sector. Technology, automation, robotics, digitalisation, are revolutionising the way we plan, design, build and maintain our homes and developments.
One major change that is going to take place this year is CORENET X. We all know that when you speak to our QPs, it can be very stressful to go from agency to agency, to have to be sometimes sandwiched between the client who might make changes to the design along the way and the various agencies who are regulators, as well as the building and construction value chain that supports your projects. But with CORENET X, we seek to reduce the number of gateways you go through, but it does mean that both the government as well as the private sector need to change the way we fundamentally plan, design and build our developments.
CORENET X is a one-stop digital gateway for regulatory submissions of building works. It streamlines approvals and facilitates collaboration. Under CORENET X, projects above a certain size will use an open, common Building Information Model (BIM) submission format. This allows our BE professionals to collaborate digitally on the same digital building model, creating a “digital spine” that links stakeholders throughout the project’s lifecycle, including the potential to harness it for facility management. We estimate that approval times can be reduced by 20% to 25% for projects submitted in BIM.
Last month, we announced the phased implementation of mandatory submissions via CORENET X. We have spoken many of you, and I’ve had the opportunity to meet many of you, and there is some trepidation or concern about whether you will be able to implement it well. We hear you. So mandatary submissions will start with new projects with GFA of at least 30,000 square metres from 1 October 2025. This will subsequently be extended to all new projects from 1 October 2026, and then to all ongoing projects from 1 October 2027. The phased implementation will provide more time for firms to adjust their internal processes – not just within your firms, but in your alliances and value chains, familiarise themselves with the new requirements. As developers, you play an important role in driving a smooth transition and helping to realise the benefits of the new system.
Now CORENET X is a very major change, it is a big innovation. We are not talking here about incremental change, it is very significant change, it requires government agencies to work together a lot more closely, so that we don’t delay each other, and don’t delay our projects that are seeking approval. On the other hand, it also needs developers, consultants, builders, to also change the way in which we build, including some other things like project payment milestones. As key stakeholders overseeing the entire project value chain, your leadership is crucial. Because if we are to truly enjoy the benefits that CORENET X intends to bring, it must mean that we must all get through these teething problems together. I encourage you to work with your consultants and contractors to ensure that your project teams are prepared for CORENET X. As many of you have told us, nothing beats actually submitting voluntary projects and trying it out for yourselves. No amount of theorising or changing of SOPs ahead of mandatory submissions will give the same learning experience.
Strengthening the BE Talent Pipeline
Next, to achieve our building aspirations and transormation, we also need a thriving ecosystem of BE professionals – architects, engineers, quantity surveyors and more.
Last September, we set up a Taskforce for Architectural and Engineering Consultants. I asked Minister Indranee Rajah and Mr Chaly Mah to co-chair this committee to uplift the professions of architects and engineers. This includes attracting and retaining talent in the BE sector, improving business sustainability and helping our BE firms to seize new opportunities from technology and innovation. I would like to thank REDAS and other TACs – SIA, ACES, IES, SISV, SPM for being a valuable partner of the Taskforce for contributing your insights and ideas. We hope this year we can look forward to the Taskforce’s recommendations following extensive engagement with stakeholders.
Conclusion
In conclusion, as we celebrate SG60 this year, I would like to acknowledge the many professionals - including many pioneers, some of whom are here with us today - in the real estate sector who have, dreamed,planned, designed and built our city over the decades.
REDAS has been an important partner who has helped to shape Singapore’s urban landscape all these years. I understand that the new REDAS Management Committee has been elected to a new two-year term.
To the outgoing committee, thank you for helping to bring the real estate sector to where it is today.
To the newly elected committee, congratulations! I look forward, as do my colleagues, to the continued close partnership between the Government and industry stakeholders like yourselves.
Together, we can confront new challenges and also seize new opportunities.
On that note once again, a happy Chinese New Year! 祝大家灵蛇献瑞，万事如意，生意兴隆，身体健康！