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Christmas wishes for a healthier property market

By Lin Zhiqin / The Edge Property | December 23, 2015 11:00 AM MYT
Tags: Christmaswishesproperty martket
‘Tis the season to be jolly, but the property market is in the doldrums. For our Christmas special, The Edge Property polled stakeholders for their wishes that will, in their opinion, help improve the health of the property market. The open-ended poll invited participants to submit up to three wishes that are actionable and can be adopted as genuine feedback by the following groups: the government, developers, analysts, property agents and consumers. The participants could choose to have their responses aggregated and kept anonymous or grant permission to be quoted. The wishes have been collated, with the key themes presented below.



Dear government,
Please review cooling measures
“I wish the government would be more in tune to the impact that some of the measures have on the livelihood of those in the real estate and related service industries, and recalibrate some of the measures to improve transaction volumes. The service industry has been hit hard because of the measures and transaction volume is as important to the market as the price component,” said Alan Cheong, head of research and consultancy at Savills Singapore.

Amid the clamour, an industry stakeholder, who opted to remain anonymous, wished for the cooling measures to remain and continue to rein in home prices, stating that “household debts have not come down to meaningful levels and interest rates have not risen to levels that will influence buyers’ decisions. According to the Department of Statistics’ household sector balance sheet data, the liabilities-to-assets ratio has been on an uptrend in recent years, rising from 15.1%in 1Q2011 to 16.7% in 3Q2015”. This respondent also wished that the government would reduce the upcoming government land sales supply to avoid a waste of resources on building units that would remain empty, as occupancy rates are expected to fall to a decade low.

Paul Ho, chief mortgage consultant at iCompareLoan, wished for the government “to coordinate a bureau where information such as car loan and credit card statements can be shared in a better manner”. “Buyers currently need to undergo onerous paperwork submission to check for total debt servicing ratio compliance. Alternatively, it could be made mandatory for financial service providers to provide monthly statements for bank financing purposes within three days of a client’s request. TDSR could be relaxed for people with high income or business owners to allow them greater flexibility in leveraging and access to funds to create employment,” he added.

Ryan Khoo, co-founder and director of Alpha Marketing, also wished for the government to work with the Malaysian government to explore out-of-the-box solutions that would address Singapore’s overly high property prices with Malaysia’s abundant land and benefit the citizens of both countries. He noted that “affordable housing is a large untapped segment in Malaysia and Iskandar is close enough for Singapore developers to operate in. This would be beneficial to Johor and Singapore in the long term, as it encourages more of the Malaysian workforce to live [in Iskandar] and commute to Singapore for work”.

Adrian Seow, investment director of Savills Singapore, wished that the government would “consider more favourably change-of-use proposals on select sites within strategic localities, such as the civic district and Tanjong Pagar, away from office use. This will make them more diverse and vibrant as places for work-live-play.”



Dear developers,
Please adjust prices
Several respondents wished for developers to adjust their prices to stimulate demand and clear the unsold inventory. According to an academic, who wished to remain anonymous, this would also “prevent an upward price spiral and lower homeownership costs that have grown too high, too fast”. The same respondent also wished that developers would “build developments that are more liveable, sustainable and environmentally friendly. [This is] to show that we can have developers that look at the greater good of society while making sufficient profit”.

The wish was echoed by an analyst who hoped that developers would “start building homes that are meant for staying and not just for investment, which would help minimise a future mismatch of expectations between investors who are selling and buyers”.

With regard to the retail segment, the analyst hoped that the developers would spare a thought for the retailers who are struggling with high rental costs, as “we do not need another boring mall with the same old tenant mix that can cope with the high costs simply because they are big. We need to reinvent our retail malls to stay ahead of the competition among regional players or we are going to fall behind, and this would eventually hurt our economy”.

The analyst’s third wish for the developers was for them to “take more calculated risks overseas because Singapore should never be a safe haven where the government will always step into help businesses if they don’t thrive. We need more home-grown companies to venture out and away from the comfort zone”.

Tan Kok Keong, CEO of REMS Advisors, expressed a wish for developers to “explore alternative means of fundraising to manage the market downturn”, which would also open up investment options in alternative instruments and help investors diversify their portfolios.

Savills’ Cheong indicated his wish that developers would appoint marketing agencies not just based on agent headcount, as a large headcount does not necessarily translate into better sales than other strategies, such as diversifying with more agencies. He also hoped for developers to motivate agents in the current sluggish market by considering more generous commissions.



Dear analysts,
Please shed more light

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