Published May 8, 2007

Property flipping: the problem will solve itself

CityDev chairman gives a developer's perspective


(SINGAPORE) Kwek Leng Beng, executive chairman of listed City Developments, reckons the problem of speculation will solve itself after a while as speculators get burned and realise it is not so easy to flip properties for a fast buck.

City Developments' One Shenton apartments sold like hot cakes in early January, drawing queues of buyers, he said.

'The next day, in the newspapers, there were so many advertisements. Everybody wants to sell One Shenton units. As a potential buyer, when you see so many ads, you get frightened, and won't buy. Psychologically, even if you have confidence in the market, you won't buy straight away because you see so many sellers.'

The 1.25 per cent of purchase price that many speculators end up forfeiting to developers rather than proceeding with a sale when they can't find another buyer will deter them from speculating rampantly, Mr Kwek said.

'After a while, they'll know this game doesn't work any more. It's not worth their while to go in. Most importantly, investors must realise that buying property is not for a short-term, immediate gain. Property, by its very nature, is a medium to long-term investment. If you think you can buy today and make a profit tomorrow, then you are not being realistic.

'And if you try to flip when the market is getting hotter and hotter and everyone advertises to sell at the same time, that effect of a hot market will also not help you to sell. If I am a new buyer, I'll say, 'Why should I pay you? I'll wait for next launch'.'

Mr Kwek is not overly concerned about the returned units at One Shenton because 'I believe there is potential to hold and sell them at higher prices when the development is completed'.

The avid tennis player, who owns a Maybach and a host of luxury sport cars including Ferraris and Aston Martins, has about 40 years of real estate experience, some of it gleaned from his father the late Kwek Hong Png, who was legendary for his property acumen.