THE opening of new MRT stations has pushed up property prices across the island and made it hard for developers to find land at viable prices.
Wing Tai Asia property director Chng Chee Beow told a discussion yesterday: 'The transportation networking makes things much closer and that brings up property prices.
'The biggest headache facing developers now is this: How can you find land with a reasonable price, so that the final cost of the product is reasonable?'
The panel discussion was held as part of the graduation ceremony for students in the Singapore Management University (SMU)-Building and Construction Authority advanced management programme.
The three-month course is for professionals in the building industry.
Analysts at the event, which was held at SMU, believe that property prices still have some room to move.
'With 700 sq km of land, and five million people, (prices) can only go one way - up,' said CIMB-GK Research economist Song Seng Woon.
'Opportunities are opening up in Singapore - when we see residential properties popping up, we see businesses setting up shop too. For instance, we are now seeing stronger pick-up in office rental so, all in all, this will support the residential market as well.'
Keppel Land, for instance, still has most of its assets in Singapore because the value of its assets here is 'very high', even though it wants overseas earnings to hit 50 per cent of the total, said chief executive Kevin Wong yesterday.
'We have been investing in office buildings... Marina Bay Financial Centre is a good example,' he added.
'Other than China, we're quite big in Vietnam and we're looking very carefully at Indonesia, where we have quite a significant exposure.'
Mr Song also points to the larger growth story in the region to explain his optimism about property values.
The price rises are a 'combination of not just local buying, but also because we've seen growth around the region and we get more buyers coming in from Hong Kong and mainland China', he said.
Low interest rates have fuelled the boom in property markets across the region, and 'property is one asset that you can leverage up on', he says.
The threat of central banks starting to roll back on monetary stimulus by raising interest rates does not worry Mr Song.
'Even if rates go up, it's going to be in environment where there's growth opportunity and momentum. So any tightening at this point will be accompanied by strong growth,' he said.
Source: Straits Times, 27 Apr 2010