Be cautious about property signals, says expert

The anti-speculative measures implemented by the government on August 30 to cool the property market could send out misleading signals, according to a property veteran.

In a telephone interview with The Business Times, David Lawrence, chief executive officer of Wheelock Properties (Singapore), urged the Singapore government to be careful in sending out a message in which some might compare investing in real estate with speculation. He added that the public could interpret the message as a signal that the government wants people to invest in bonds and shares instead, which could be dangerous.

He made the case for investing in real estate as a safe long-term investment and hedge against property inflation, as long as investors do not over gear.

“Various people in government keep saying: 'Oh we want to stop property speculation.' Now that's wrong. You should not really differentiate between investments in different asset classes. That's up to individuals to make their own decision where they are going to invest,” said Mr. Lawrence.

“If you differentiate against different asset classes, it's quite dangerous. If you're going to say: ‘Oh we don't want you speculating in properties’.”

“Let's say you buy Sing Tel shares today and sell them tomorrow, is that investment? No it's speculation. The same with bonds. If people start thinking the government wants them to buy shares or bonds because it's investment, that's very dangerous.”

“I think this use of the word 'speculation' for property and 'investment' for everything else is not correct,” Mr. Lawrence said.

“I am 64 years old now. If I look back, (I can tell you) if you invest in property, never mind the crashes, and ups and downs, in the long term you make money, as long as you're not stupid enough to over gear. You invest in property and property will always be there, particularly prime property. I can't tell you how many people I know have lost all their money investing in bonds - and currently there is a bond bubble - and by investing in shares as well.”