Let Property Cooling Measures Run Their Own Course

THE Government should let the property cooling measures run their course and refrain from imposing new ones in case they hurt the market, noted an industry leader last night.

Mr Wong Heang Fine, the president of the Real Estate Developers' Association of Singapore (Redas), said any sharp fall in prices will hurt as more than 90 per cent of Singaporeans are home owners.

"We do not want people to look back and say we overdid our policy measures," he said, speaking to more than 600 guests, including National Development Minister Khaw Boon Wan, at Redas' 53rd anniversary dinner at the Mandarin Orchard.

Mr Wong said the measures had created a safety valve that would help moderate the market.

"Thus, we would like to suggest to policymakers not to tighten the demand tap any further but to allow the recent measures to run their course."

He acknowledged the unusual environment of high global liquidity and low interest rates.

Still, he noted, though developers share the Government's desire to foster a stable, sustainable market, the measures penalise the private sector, which makes up only 20 per cent of the housing market. Not only are private developers burdened with high development costs and taxation, but they are also under increasing strain from rising inventories.

Mr Wong touched on the many challenges facing developers. Higher land prices, for instance, have significantly increased the risks as they make up a sizeable part of the development costs.

"We have little choice but to participate in land bids even though we know it is highly competitive. Consequently, we have a vicious circle of rising land costs," Mr Wong said.

He added that Redas will work with the Government to explore ways to keep land costs in check.

Mr Khaw noted in the commemorative booklet that "the current residential market is in transition. I hope we can all help it to make a soft landing".

Developers that The Straits Times spoke to generally echoed Redas' view, but noted that the property market was still "healthy".

Mr Chia Ngiang Hong, Redas' second vice-president and City Developments' group general manager, said the Government should consider moderating the land supply in the first half of next year, taking into account the large supply numbers in the pipeline. He said private home prices might still rise "a bit" next year.

Mr Lim Ee Seng, the chief executive of Frasers Centrepoint and Redas' first vice-president, said his company is managing risks by not being overly aggressive in land bids.

He added that inventory risk could be a key challenge next year for some firms, given the many uncertainties in the market, and because developers are keen on a quick turnaround of sites instead.

Redas donated $88,000 yesterday to The Straits Times School Pocket Money Fund.

Source: Straits Times - 1 Dec 2012