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Thread: 'Let cooling measures run their course'

  1. #1
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    Default 'Let cooling measures run their course'

    http://www.straitstimes.com/archive/...ourse-20121201

    PROPERTY

    'Let cooling measures run their course'

    Further steps may actually hurt market: Redas chief

    Published on Dec 01, 2012

    By Esther Teo


    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.

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  2. #2
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    Default 'Let cooling measures take their course'

    http://www.businesstimes.com.sg/arch...ourse-20121201

    Published December 01, 2012

    'Let cooling measures take their course'

    Redas urges policy-makers not to tighten the demand tap further

    By ong chor hao


    LET the golden goose that is the real-estate sector continue laying its golden eggs.

    This was the message from Wong Heang Fine, president of the Real Estate Developers' Association of Singapore (Redas), who last night urged the government to allow the recent cooling measures for public housing to take their course.

    Speaking at Redas' 53rd anniversary dinner, he said it was an unusual time for developers, with high global liquidity and low interest rates.

    The slew of recent cooling measures already made for a safety valve to moderate the market, he said, and urged that policy makers refrain from tightening "the demand tap" any further.

    "We do not want a situation where people look back and say we overdid it in our policy measures," he said.

    He noted that, in the last two decades, both new and resale Housing and Development Board (HDB) flats have become increasingly treated as investment assets, on top of being homes.

    "Coupled with pent-up demand for homes from new households every year, we have seen record housing prices both for HDB homes as well as private residential units," he said.

    The government, responding to this, has stepped up the supply of flats, hastened land sales and implemented several rounds of cooling measures.

    Mr Wong said while Redas shared the government's intention of fostering a stable and sustainable property market, the measures penalised private developers, whose projects comprise only 20 per cent of the housing market.

    Developers have come up against a "vicious cycle of rising land costs", he said.

    But because land is like flour in the "bread" that developers make, they have little choice but to take part in land bids - even when these are highly competitive, he said. This is so that they can sustain their operations, retain the jobs they create and provide adequate returns to their shareholders.

    Chia Ngiang Hong, the group general manager at City Developments Limited, asked for his reaction to Mr Wong's speech, agreed that high land costs are a challenge to developers.

    He said he hoped that the government could moderate the supply of land, put more land on the reserve list and put a halt to more cooling measures.

    Group chief executive of Frasers Centrepoint Limited Lim Ee Seng, also spoke to reporters on the sidelines of the dinner, responding to Mr Wong's point that the government's cooling measures had led to private developers becoming burdened with not only "persistently high development costs and taxation" but also the increasing strain from rising inventories.

    Mr Lim said developers with large inventories need to have a "quick turnaround" as soon as they can to minimise their risk.

    Mr Wong, who is also chief executive at CapitaLand Residential Singapore, also said in his speech that, with more than 90 per cent of Singaporean households being homeowners, sharp falls in property prices will have "undesirable consequences".

    He said Redas shared Minister for National Development Khaw Boon Wan's views that everyone should help ensure a soft landing as the residential market undergoes its current transition.

    Mr Khaw was the guest of honour at last night's event held at the Mandarin Orchard Singapore.

    Mr Wong said it may be time to rethink a balanced housing policy menu which offers affordable public housing for the majority, while ensuring that the private sector continues to play an important role.

    To that end, Redas will release a paper reflecting developers' collective voice on the challenges of property development and the vision of Singapore in 2030, he said.

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