GK Goh Securities expects the supply of private-sector residential units to fall in 2004 as a result of fewer government sites for sale and the sharp decline in farmland conversion projects. It estimates there will be 30,000 new flats available for sale this year, but only 20,000 to 25,000 each next year and in 2003, down more than 20 per cent. The Government suspended land sales for nine months in 1998. They resumed in 1999, but only a small number of plots have been sold through auctions and tenders. There has been a substantial drop in the past few years in the number of sites taken up by developers by auctions or tenders, as well as farmland converted into residential use. GK Goh said the number of units to be completed in 2004 might fall. Because property projects could be pre-sold 20 months before completion, the fall in supply might start to show in the market from next year. The possible decline in new-flat supply also was reflected in the receding number of consent to commence work applications pending government approval. In the 12 months to the middle of last year, the Government received and approved applications to develop 34,000 private units. But, in the past 12 months, the figure was only 20,000. In line with the decline, property development schedules of major developers fell an average 20 per cent to 25 per cent in terms of floor area for residential units to be completed in the next few years. GK Goh said the Government's shrinking land-sales programme this financial year pointed to reduced flat supplies three to four years down the road. The switch to sell most land sites through the application list system had changed the rules of the game, giving greater control on land supply to leading developers. 'As the developable areas of sites on the application list are large and involve heavy investments, small developers are unable to participate,' it said. 'An oligopoly, plus the uncertainty facing the property market, means major developers can form cartels to control land supplies through well-timed bids for sites on the application list.' Although this year's land-sales programme might provide sites that could be developed into 21,700 units, developers might be able to force the supply of private units to decline to 13,200 by choosing not to apply for sites, the brokerage said. 'A smaller supply will give developers stronger pricing power for their projects,' it said. The awarding of tenders for a large number of sites above new railway and subway stations also had slowed due to lack of interest from developers.