Redas still confident on property market

While property developers are generally coy on the effect of the recent measures aimed at cooling the real estate market, some are optimistic in the long-term prospects of the property market.

Simon Cheong, president of Real Estate Developers' Association of Singapore (Redas), said the recent measures are unlikely to affect genuine homebuyers, though they may have an impact on affordability because of a higher upfront cash component.

Based on research conducted by Redas, the current affordability ratio for first-time private homebuyers “remains at a healthy 36 percent, below the 40 percent norm.”

“Redas is confident that the Singapore property market will continue to create value for home owners and investors in the long term (and the measures are) in line with the government's longer-term objectives to maintain a stable and sustainable property market,” said Mr. Cheong.

“As president of Redas, I continue to be upbeat on the property market in the long term. Singapore's fundamentals remain strong.”

Mr. Cheong cited the country’s hosting of the Formula One Grand Prix and Youth Olympic Games, and pointed out that Singapore can look forward for more MICE (meetings, incentives, conventions and exhibitions) business and visitor arrivals.

“Upcoming projects and events will also further position Singapore as wealth management hub and a global city,” added Mr. Cheong.

Developers also acknowledged that the property measures have caused uncertainty in the market.

“But it's not a great degree of uncertainty; we are still moving (units),” said Liew Mun Leong, chief executive and president of CapitaLand Group. ”If there is real demand, people need a home, interest rates are low, liquidity is there and the affordability is there, they will buy. Somebody said that policy cannot overrule demographics and economics. I subscribe to that too.”

Mr. Liew said the measures will slightly dampen prices of private homes, but he declined to estimate the price fall quantum. The high-end residential market is not likely to be affected by the measures since buyer demand in the sector are driven by factors that cannot be controlled by the government, such as excess liquidity in the market and a low interest rate environment, he added.