DEVELOPERS will be bringing forward their property launches over the next few months to satisfy strong demand from homebuyers, said Real Estate Developers’ Association of Singapore (Redas) president Simon Cheong yesterday.
But Mr Cheong, who was speaking at Redas’ spring festival lunch, warned that many developers are now facing depleting land banks following brisk home sales in recent months. Developers, he said, were surprised at the speed of the recovery in the property market.
Property groups including Allgreen Properties, CapitaLand, City Developments, Frasers Centrepoint, MCL Land and UOL Group are all looking to launch projects over the next few months.
‘Redas’ members are committed to fast track supply to satisfy demand to minimise excessive speculation in the property market,’ said Mr Cheong. ‘Hopefully when demand is satisfied, there will be less pressure for future anti-speculative measures.’
Property groups here appear to have shrugged off the measures introduced by the government last Friday to cool the market.
The government said that a seller’s stamp duty will be levied on those who buy a residential property and sell it within a year. Currently, stamp duty is levied only for the purchase of a property and not its sale. Also, the loan-to-value limit on housing loans will be lowered from 90 per cent to 80 per cent.
Developers said that while volumes might contract in the short term, demand for private homes is expected to hold up well this year. Sales of new private homes by developers rose to 1,476 units in January – three times as high as the previous month and the highest level since August last year.
‘Sentiment will initially see a knee-jerk reaction and be affected, but over time, people will realise … that the interest rate environment is still very low,’ said City Developments executive chairman Kwek Leng Beng at the group’s results briefing earlier in the day. ‘If you don’t buy today, by the time you want to buy, the prices could have gone up a lot more.’
City Developments group will roll out five projects with around 1,600 units this year – The Residences at W Singapore Sentosa Cove and one residential project each at Chestnut Avenue, Thomson Road, Pasir Ris and in the Dunearn Road area.
Other market players shared similar sentiments. Frasers Centrepoint CEO Lim Ee Seng believes that the most recent anti-speculation rules are unlikely to disturb the property market much.
Frasers Centrepoint will officially launch its 81-unit Residences Botanique along Sirat Road tomorrow. It also has two launches planned for Q2 – a 393-unit project on the former Flamingo Valley Site along Siglap Road and phase three of its Waterfront Collection along Bedok Reservoir.
The buzz in private home sales continued this week – even after the newest anti-speculation measures were announced.
At MCL Land’s preview of its Yishun condo The Estuary yesterday, most of the 200 units launched were snapped up at an average price of $750 per square foot. MCL Land will roll out another 120-150 units in the project over the coming weekend – with selective price increases – said chief executive Koh Teck Chuan.
‘So far, the impact (of the government measures) is not noticeable,’ said Mr Koh. But units and projects that are more popular with investors could see a drop-off in demand, he added. MCL Land will also preview its 65-unit D’Mira at Boon Teck Road in mid-March.
UOL Group also intends to launch two projects in April or May – a 616-unit development at Dakota Crescent and a 172-unit project on the former Rainbow Gardens site at Toh Tuck Road.
But depleting land banks were a concern, Mr Cheong said. Redas ‘is now looking forward to more sites in the confirmed list for developers to replenish their land banks’, he said.
‘We believe the long-term solution to a sustainable and stable market is still adequate supply,’ Mr Cheong noted.
One developer told BT that it is important for his counterparts and himself to have enough in their land banks. But ‘at the same time, we don’t want the government to flood the market and over-supply,’ he said.
He added: ‘The best thing for the government to do – which is something very difficult and I don’t envy them – is to try to sell just enough so that the market will not catch fire, and not sell too much so that the market will go under.’
Source: Business Times, 26 Feb 2010