The Real Estate Developers’ Association of Singapore (Redas) has persistently called for the Government to remove some of the measures that were intended to control runaway property prices (“Time to ease property curbs, say developers”; last Friday).
It seems that developers are getting nervous, as the five-year deadline for them to complete and sell all units, under the qualifying certificate and additional buyer’s stamp duty rules, approaches.
Did these rules slip their minds when they were assessing the various scenarios before putting in a bid for land sites?
Instead of asking the Government to calibrate the cooling measures, I suggest they face reality and start cutting prices to move inventories.
Two other reports on the same day caught my eye (“Luxury home price slump draws interest from funds” and “Strong turnout, healthy bids for Yio Chu Kang EC site”).
I can draw two conclusions from these reports.
First, developers know their risk-reward composition, seen in the fact that 10 developers are still keen to bid for residential sites, despite the current climate.
Second, the state of our property market is not so dire, since local and overseas funds still see opportunities.
The property business can take a leaf out of the book of other sectors.
The retail and food and beverage sectors, and small and medium-sized enterprises have long pleaded for lower foreign worker levies, as they traditionally rely on cheap foreign labour.
With their requests denied, some are adopting automation and redesigning workloads.
Property developers seem to prefer to lean on the Government to make things easier for them, rather than seek novel ways to sell their projects. They can do better.
All should be prepared to see lower profits. After all, isn’t this part of the cycle? But, if a product is at the right price, and the current market sentiment is factored in, buyers will turn up.
So, instead of lobbying ministers at every opportunity, developers should bite the bullet and start drawing up new plans to sell their units.
Derek Seet Chang Hui
This article was first published on February 22, 2016.
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