Redas president urges government to review property cooling measures

By Amy Tan / EdgeProp Singapore | February 22, 2019 2:30 PM SGT
The new president of the Real Estate Developers’ Association of Singapore (Redas), Chia Ngiang Hong, called for a review of property cooling measures at the industry association’s annual Spring Festival Lunch held at Shangri-La Hotel on Feb 19. The guest-of-honour was Finance Minister Heng Swee Keat.
Chia, who is also the group general manager of City Developments Limited, says that although the government formulates public policies, the private sector could help “make the policies better and more targeted”.
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From right: Redas president Chia Ngiang Hong; Finance Minister Heng Swee Keat; Kwek Leng Beng, Redas’ honorary patron; Augustine Tan, Redas’ immediate past president; and Cheong-Chua Koon Hean, deputy secretary (special duties), Ministry of National Development at the Redas Spring Festival Lunch on Feb 19 (Credit: Samuel Issac Chua/EdgeProp Singapore)
For instance, Chia raises the issue of the additional buyers’ stamp duty (ABSD) for developers. As of July last year, the ABSD paid by developers on land acquisitions was doubled from 15% to 30%, with a 5% that is paid upfront and non-remittable. The time frame to develop and sell all residential projects – regardless of size – has also been capped at five years.
“This policy has pushed all developers to exhaust their inventory at around the same time, and could partly account for the land price escalation in 2017 and 2018 because everyone basically ran out of inventory at the same time,” Chia shares.
While excessive land banking ought to be discouraged, Chia calls for “some flexibility” in the five-year time frame to sell out projects.
This could help curtail “the bundling of the project development cycle” that saw developers replenishing their landbank at the same time.
“If the ABSD on land purchases is not reviewed, we can expect a repeat of the 2017–2018 ‘land grab’ situation in four to five years’ time,” he cautions. “When the price of the raw material goes up, we can expect the price of the end-product to increase as well.”
Chia also suggests that the government review the loan-to-value (LTV) limits for first-time homebuyers so that young Singaporeans can fulfil their aspirations of owning a private home. He adds that the government can also make it easier for HDB upgraders to own private homes by reviewing the timing of the upfront payment for the ABSD so as to ease their cashflow planning.
“As a long-term stakeholder in Singapore’s success, Redas wishes to facilitate a...