[SINGAPORE] The head of the property developers’ body yesterday said the future shines bright with exciting possibilities, even as the property market takes its course through the cycle of business.
Speaking at the Real Estate Developers’ Association of Singapore’s (Redas) mid-autumn celebration, its president, Chia Boon Kuah, also said Redas planned to increase its public engagement in several areas including offering ideas to the authorities on new plans for Tanjong Pagar and Paya Lebar.
Mr Chia later told reporters that despite the policy measures affecting the property market that were introduced this year, interest from foreign players – not just developers but also private equity investors – in buying development land in Singapore “remains unabated”.
“They have done their sums,. . . their study and they believe in the future of Singapore.
“They still see value in real estate in Singapore. They still see that it’s worth their while to invest here. Obviously, the future of Singapore – medium term and long term – is to them very promising. And that has been articulated by the Prime Minister in that bold vision,” said Mr Chia, referring to Prime Minister Lee Hsien Loong’s National Day Rally speech.
Mr Lee had outlined plans for the new Southern Waterfront City that will come up in Tanjong Pagar when the existing container port facilities move to Tuas; the expansion of Changi Airport; and the relocation of Paya Lebar Airbase to Changi, which will free up 800 ha for new developments.
Yesterday, Mr Chia also highlighted that new developments are coming up in the old CBD. For instance, the commercial site at Telok Ayer Street/Cecil Street sold by the state recently means that part of town will “grow and then push further south to the Tanjong Pagar new waterfront city”. In the Marina South location, the International Cruise Terminal and M+S’ Marina One project will also help create new buzz, he added.
In Changi Airport, the development of The Jewel, new terminals and a new runway will have a “multiplier effect on business and finally on the property market”, said Mr Chia.
Transactions for private homes have slowed drastically. Buyers, especially investors, have been hit by the additional buyer’s stamp duty, lower loan-to-value limits and stricter approval for property loans under the Total Debt Servicing Ratio (TDSR) framework. Sellers, on the other hand, may be slapped with steep seller’s stamp duty rates depending on the holding period for the property.
Many in the industry highlight the problem for would-be upgraders thinking of moving from an HDB flat to a private property, or even moving from one private home to another as they will be hit by the TDSR.
For this, OrangeTee managing director Steven Tan has a suggestion: “Developers could provide assistance to genuine buyers who need to offload existing properties by helping them with interim accommodation during the construction period of their new homes.”
Even well-heeled property buyers not affected much by the TDSR are holding back their purchases of private homes in anticipation of price cuts. Some developers have stated that they are launching new projects at prices below their initial expectations. Analysts say it is just a matter of time before developers of existing projects, where sales have stalled, may also chop prices to move units.
Giving a different take, Suntec Real Estate Consultants director (research and consultancy) Colin Tan argues that there is still a lot of liquidity in the system. However, property investors – who made up a significant portion of demand for private homes, pre-TDSR – are affected by sentiment.
“A key concern is whether the QE tapering (in the United States) will be gradual and not noticeable, or whether things will go awry,” he added.
Some market observers believe that response to private residential launches in coming months may be patchy. “Locations where there has not been much new supply in recent years may see better take-up, whereas those with several launches in the past couple of years may see slower take-up. So things will be more micro-market-driven going ahead,” said a market watcher.
Source: ST Property - http://www.stproperty.sg/articles-property/singapore-property-news/redas-chief-sees-bright-future-for-property-sector/a/136172