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PR Newswire
28-12-2011, 04:22 AM
Business Times - 28 Dec 2011
Developers, govt agree to disagree
Redas chief calls ABSD 'Another Bad Shock for Developers', minister says that it is necessary
By MINDY TAN AND FELDA CHAY
(SINGAPORE) That the government and developers disagree over the latest cooling measures was made plain at last night's Redas dinner, where deeply divergent views were publicly aired.
The Real Estate Developers Association of Singapore's 52nd anniversary dinner was the first public function for the industry since the government announced the cooling measures, including the Additional Buyers Stamp Duty (ABSD) on Dec 7.
In the presence of Tan Chuan-Jin, Minister of State for National Development and Manpower, who was the guest-of-honour at last night's event, Redas president Wong Heang Fine called the ABSD an 'Another Bad Shock for Developers'.
In his speech, Mr Tan acknowledged that he did not expect developers to welcome the measures, but reiterated that the measures were implemented in the common interest for a stable and sustainable property market.
'Our small property market is attractive to foreign funds . . . (So) the latest measure is a targeted and measured move to moderate such investment demand in order to avoid the need for a major correction down the road,' he said.
Mr Wong, however, had a different take. Beyond the short-term concerns of property sales volume and prices falling, there are other longer-term concerns, he pointed out. Mr Wong is also the chief executive of CapitaLand's Singapore residential arm.
Not only could the government measures lead to a higher cost structure for developers due to higher land acquisition cost, they could potentially have a knock-on effect on mortgages resulting in a possible decline in home equity values and consequently, shrinking wealth, he said.
The measures may also risk hurting the already frail economy and dampening foreign investments and business prospects in Singapore.
'One analyst is even of the view that these harsh measures could tip the economy - already on the edge - into recession,' said Mr Wong, in a publication issued by Redas to celebrate its 52nd anniversary, Building an Outstanding Global City.
'With real estate activities accounting for some 5.2 per cent of GDP, a 25 per cent fall in property transactions in 2012 could shave GDP growth by about 1.3 per cent,' he warned.
In December, the government rolled out the ABSD to moderate investment demand for private residential property. Foreigners and companies buying any private residential property now pay an ABSD of 10 per cent of the purchase price or market value, whichever is higher.
A 3 per cent ABSD applies to permanent residents buying their second and subsequent homes, and Singaporeans buying their third and subsequent residential property.
Another point of contention was the government's lack of consultation with Redas and other industry players, before implementing the cooling measures.
'It is Redas's wish to continue to engage the government in close dialogues even on sensitive matters such as cooling measures before they are implemented,' said Mr Wong.
However, Mr Tan countered that while there are many areas of mutual interest in which the government would be 'happy to engage in closer dialogue', the government 'may not be able to consult Redas on every issue, especially those that are market-sensitive'.
'Importantly, it is not about common consensus, but about doing the right thing and implementing the right policy,' he said.
Further, Mr Tan said that the Ministry of National Development was prepared to release more land for the development of 5,000 executive condominiums (ECs) next year to help more higher-income Singaporeans own private housing.
This follows the government's move, in August this year, to raise the monthly income ceiling for the purchase of new ECs from $10,000 to $12,000. According to Mr Tan, around 220 households have since benefited from the higher income ceiling.
He reiterated that the government remains committed to helping first-time owners and newlyweds address their housing needs, and will begin to pay more attention to helping HDB second-timers next year.
Noting that it is still too early to comment on the impact of the measures on property prices, Mr Wong said that Redas will continue to assess the impact of the latest measures in consultation with industry players, before providing appropriate feedback.
Noting that the policy is 'short term' in nature, to address the influx of funds from foreign investors into the property market, Mr Wong said: 'Let the measures take its natural course, and then we'll look at it.'
Developers, govt agree to disagree
Redas chief calls ABSD 'Another Bad Shock for Developers', minister says that it is necessary
By MINDY TAN AND FELDA CHAY
(SINGAPORE) That the government and developers disagree over the latest cooling measures was made plain at last night's Redas dinner, where deeply divergent views were publicly aired.
The Real Estate Developers Association of Singapore's 52nd anniversary dinner was the first public function for the industry since the government announced the cooling measures, including the Additional Buyers Stamp Duty (ABSD) on Dec 7.
In the presence of Tan Chuan-Jin, Minister of State for National Development and Manpower, who was the guest-of-honour at last night's event, Redas president Wong Heang Fine called the ABSD an 'Another Bad Shock for Developers'.
In his speech, Mr Tan acknowledged that he did not expect developers to welcome the measures, but reiterated that the measures were implemented in the common interest for a stable and sustainable property market.
'Our small property market is attractive to foreign funds . . . (So) the latest measure is a targeted and measured move to moderate such investment demand in order to avoid the need for a major correction down the road,' he said.
Mr Wong, however, had a different take. Beyond the short-term concerns of property sales volume and prices falling, there are other longer-term concerns, he pointed out. Mr Wong is also the chief executive of CapitaLand's Singapore residential arm.
Not only could the government measures lead to a higher cost structure for developers due to higher land acquisition cost, they could potentially have a knock-on effect on mortgages resulting in a possible decline in home equity values and consequently, shrinking wealth, he said.
The measures may also risk hurting the already frail economy and dampening foreign investments and business prospects in Singapore.
'One analyst is even of the view that these harsh measures could tip the economy - already on the edge - into recession,' said Mr Wong, in a publication issued by Redas to celebrate its 52nd anniversary, Building an Outstanding Global City.
'With real estate activities accounting for some 5.2 per cent of GDP, a 25 per cent fall in property transactions in 2012 could shave GDP growth by about 1.3 per cent,' he warned.
In December, the government rolled out the ABSD to moderate investment demand for private residential property. Foreigners and companies buying any private residential property now pay an ABSD of 10 per cent of the purchase price or market value, whichever is higher.
A 3 per cent ABSD applies to permanent residents buying their second and subsequent homes, and Singaporeans buying their third and subsequent residential property.
Another point of contention was the government's lack of consultation with Redas and other industry players, before implementing the cooling measures.
'It is Redas's wish to continue to engage the government in close dialogues even on sensitive matters such as cooling measures before they are implemented,' said Mr Wong.
However, Mr Tan countered that while there are many areas of mutual interest in which the government would be 'happy to engage in closer dialogue', the government 'may not be able to consult Redas on every issue, especially those that are market-sensitive'.
'Importantly, it is not about common consensus, but about doing the right thing and implementing the right policy,' he said.
Further, Mr Tan said that the Ministry of National Development was prepared to release more land for the development of 5,000 executive condominiums (ECs) next year to help more higher-income Singaporeans own private housing.
This follows the government's move, in August this year, to raise the monthly income ceiling for the purchase of new ECs from $10,000 to $12,000. According to Mr Tan, around 220 households have since benefited from the higher income ceiling.
He reiterated that the government remains committed to helping first-time owners and newlyweds address their housing needs, and will begin to pay more attention to helping HDB second-timers next year.
Noting that it is still too early to comment on the impact of the measures on property prices, Mr Wong said that Redas will continue to assess the impact of the latest measures in consultation with industry players, before providing appropriate feedback.
Noting that the policy is 'short term' in nature, to address the influx of funds from foreign investors into the property market, Mr Wong said: 'Let the measures take its natural course, and then we'll look at it.'
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