Deeply divergent views from the government and developers regarding the recent property cooling measures were aired at the Real Estate Developers Association of Singapore’s (REDAS) 52nd anniversary dinner.
The event was the first public function for the industry after the Singapore government imposed the latest cooling measures.
Tan Chuan-Jin, Minister of State for National Development and Manpower, was invited as the guest-of-honour at last night’s event. In his presence, Wong Heang Fine, President of REDAS, called the additional buyer’s stamp duty (ABSD) “Another Bad Shock for Developers”.
Tan noted that he did not expect property developers to welcome the measures. He reiterated that the measures had been imposed for a sustainable and stable property market.
“Our small property market is attractive to foreign funds…(so) the latest measure is a targeted and measured move to moderate such investment demand in order to avoid the need for a major correction down the road,” he said.
Wong, however, pointed out that beyond the short-term concerns of falling prices and property sales volumes, there are longer-term concerns.
He said that the government measures have resulted in a higher cost structure for developers due to higher land acquisition costs, which could have a knock-on effect on mortgages, leading to a possible fall in home equity values and shrinking wealth.
“One analyst is even of the view that these harsh measures could tip the economy — already on the edge — into recession,” Wong added.
“With real estate activities accounting for some 5.2 percent of GDP, a 25 percent fall in property transactions in 2012 could shave GDP growth by about 1.3 percent.”