Many property developers enjoy the surge in interest from buyers, but they are doubtful that a speculation has arrived at a point where the government needs to get involved.
The developers also maintain that the current economic status will stop a bubble formation and will start to cool the buying frenzy in its tracks.
According to Donald Han, the managing director of Cushman and Wakefield, “It’s not a bubble, it’s just a blister after the pain we experienced in the global financial crisis and it comes before a recovery.”
However, industry insiders and some developers admit that the remarks this week from Mah Bow Tan, the National Development Minister, are timely.
Mister Mah advised buyers not to charge impetuously and tread carefully before rushing into the market. He also warned about a bubble forming, suggesting interventions once a speculation got out of hand.
“The Government’s message is quite clear: Don’t rush as there is a lot of supply coming onstream”, said Lee Sze Hao, the chief executive of Sing Holdings.
“It’s good as a reminder so that people do not over-buy, over-chew. Developers do not want irrational exuberance”, Mr Han elaborated.
“There shouldn’t be panic-buying. Buyers may pull back a bit, not knowing whether the Government will step in or not. The fact is that the Government has opened its mouth; it can do things indirectly”, told by a property consultant, who refused to be named, to The Strait Times.
“But if the market hype continues to rise, they will have to do something”.
The hype that most people feel, which is mostly focused on condos, will probably be just transitory in the middle of a recession.
“Inevitably, there will be speculative buyers, but they are for the smaller units…If the market is too speculative, you build up a bubble and that’s not real demand”, Mr. Lee said.
He explained that the market is looking for cashed-up investors who are prepared to spend, unlike those speculators searching to purchase another flat just to have easy earnings. He added that the government will only start to function if every unit is snapped up and there is a queue at each project.
Last Wednesday, the Real Estate Developers Association of Singapore (REDAS) commented that only a few launches have become successful for varying reasons.
Property buyers have surely visited new showflats and buy new homes, which is out of the plan. In response to that, queues have been developing and developers have raised prices.
Even though the public launch is scheduled this day, the interest was proven at Tanah Merah last night, as many people assembled at the 297-unit Optima showflat.
The reaction by the buyers was strong. In fact, the TID developer kept a ballot during midnight for around 300 buyers who were lining up earlier outside the showflat in order for them to leave early.
According to the spokesman of the showflat, at 9:30pm, the buyers had presented cheques along with their application form for the 120 units being offered at an average early-bird value of $790 per square foot.