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Published October 7, 2006

Singapore developers still look to mass market boost

(SINGAPORE) Singapore's property developers gathered for the Mid-Autumn Festival yesterday - and once again toasted a better performance in the mass-market segment of the private residential market.

Making a wish: Redas president Kwee Liong Keng (left) with Singapore Land Authority chairman Greg Seow at yesterday's celebrations.

The boost, at least one industry veteran predicted, could come from foreigners choosing to make Singapore their second home.

'We believe that the low-to-mid (end of the market) should catch up. I think the catch-up should come gradually,' City Developments group general manager Chia Ngiang Hong told reporters on the sidelines of yesterday's function.

Mr Chia is also second vice-president of Redas, the Real Estate Developers Association of Singapore.

Redas president Kwee Liong Keng told reporters: 'Many of our members feel that next year, the market should be quite good.'

Some developers, he said, expect prices to go up by about 5-10 per cent next year. But he was referring to the overall private residential market without distinguishing between the high end and mass markets.

Ho Bee Group's chairman and chief executive Chua Thian Poh, summing up the two-tier market that has developed over the past two years, said: 'Prices of HDB resale flats and lower-end private homes are still below prices during the last peak, while prices in the luxury sector have already surpassed the previous high and still have steam to go up further.

'Hopefully, with the economy picking up and employment at a 15-year high, mass-market prices will pick up in the next few months,' he said.

Some of his peers are more downbeat.

An executive director of a listed property group observed: 'There are many people who are still shell-shocked by the bad times - they've lost jobs or found new jobs with considerably lower pay.

'They'll need a couple of years of steady jobs and income before they dare go into the market and take a loan again. That's why the mass-market segment has not been able to move up.'

But the impetus for a recovery in the mass market could come from the same source as in the high-end market: foreigners.

Said Knight Frank's managing director Tan Tiong Cheng: 'Singapore is truly shaping up to be a global city. The government has been making all the right moves. They're now pitching Singapore not only as an investment destination but as an alternative home.

'The newly rich Asians living in India, China and even Malaysia may answer the call to apply online to become permanent residents or citizens of Singapore.'

He added: 'Whereas the super-rich and wealth management clients are being drawn to luxury homes in Singapore, professionals in Asian cities could buy HDB resale flats and entry-level private homes.

'So we'll attract the whole spectrum of foreigners to invest in the Singapore property market. That will give it more depth.'

Giving a similar view, Redas honorary treasurer and Far East Organization's deputy chief operating officer Eddie Yong said: 'It (the mass market) might benefit a bit from working professionals who come to Singapore and take up citizenship.'

Perhaps because of this, developers - who in the past have held back on mass-market residential launches - can be expected to launch more such projects in the near future, said Mr Chia. 'I believe more (mass-market launches) are being planned in the lower segment of the market,' he said.