CDL chief calls for review of property cooling measures

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CDL chief calls for review of property cooling measures

Kwek Leng Beng points to falling prices, fears over global economy

Published on Feb 08, 2014

By Melissa Tan


A PROMINENT real estate industry veteran called on the Government yesterday to review some of its property market cooling measures as home sales and prices fall.

"As the property market starts to cool... this may be the right time to tweak the control measures in the light of concern over the global economy," said City Developments (CDL) executive chairman Kwek Leng Beng.

"It does take time for the medicine to work. Both the private and public sectors want a soft landing."

He was speaking at a lunch organised by the Real Estate Developers' Association of Singapore (Redas) at the W Singapore - Sentosa Cove.

Mr Chia Boon Kuah, Redas' newly re-elected president, told the lunch that a triple whammy of home loan restrictions, looming oversupply and surging labour costs has been "unnerving to developers, to say the least".

Property consultants and agents echoed Mr Kwek's views yesterday, adding that some property curbs could be modified to prevent the market from going into a tailspin.

"We need a tweak because the market is reaching a psychological fear level where crowd behaviour believes that the market is going to crash," said Savills research head Alan Cheong. "The Government could keep on top of this situation by turning that perception around, so that it doesn't become self-fulfilling."

Prices of both private and public housing fell more than expected in the final three months of last year. Private home prices slid 0.9 per cent and Housing Board resale prices tumbled 1.5 per cent - both worse than the Urban Redevelopment Authority's flash estimates.

PropNex chief executive Mohamed Ismail said: "If policies hurt the volume of transactions and prices, that is not sustainable growth. If sentiment goes negative, it takes much more time to rebound."

However, some prospective buyers said they would like the cooling measures to stay unchanged, so that prices keep going down.

"I want the measures to stay in place. The key is that I want to get a good deal," said Mr Sam Goh, 27, who runs a financial services firm. He said he was on the lookout to buy a second private home in the $400,000 to $800,000 range and had enough cash on hand. He said he did not mind paying the additional buyer's stamp duty (ABSD) as long as the overall price had dropped.

Mr Kwek said developers should "continue to work closely and collectively with the Government to ensure a sustainable property market, which is a difficult balancing task".

He was also given the inaugural Redas Lifetime Achievement Award at the lunch yesterday.

The association noted that Mr Kwek was "known for his foresight and astute acquisitions". It added that he has also helped to reform the property sector with actions such as the introduction of the Developers' Fund to protect buyers, which enforced the rule that money collected for a specific project could not be used for any other purpose.

When asked for examples of how the cooling measures could be tweaked, Mr Kwek told reporters the Government should, for instance, remove the ABSD imposed on foreigners buying property. "We should attract foreigners but... we penalise them. Why don't we just say, 'If you sell within three years, four years, then I tax you? You come in, I don't want to tax you'. I think this is one way."

ABSD for Singaporeans and permanent residents could also be removed, he suggested, adding: "I don't believe there is a lot of speculation."

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Published February 08, 2014

Tweak cooling measures, urges Leng Beng

He suggests taxing foreign buyers who offload properties within 3-4 years instead

By Felda Chay [email protected]


IT is time for the government to tweak some of its property cooling measures such as the additional buyer's stamp duty (ABSD), given concerns over the global economy and signs that the property market here is slowing down, said Kwek Leng Beng, executive chairman of Hong Leong Group Singapore and property developer City Developments.

He suggested that the government consider lifting the hefty stamp duties imposed on foreigners when they buy property here, and replace it with a tax on sellers who offload their property three or four years after snapping it up.

"Everybody is attracting foreigners today to their countries. We should attract foreigners. But if . . . you penalise them by having to pay additional tax, then they (will) say you don't welcome me.

"So why don't you (the government) just say, if you sell within three years, four years, then I tax you. You come in (and buy property) I don't want to tax. I think this is one way," said Mr Kwek, who was speaking to reporters on the sidelines of the Real Estate Developers' Association of Singapore (Redas) Spring Festival lunch yesterday.

The government can also consider lifting ABSD for locals - who are subject to the additional tax when they purchase more than one home - and permanent residents, he said.

"I don't think there is a lot of speculation. The prices are high because developers have got no land stock . . . in the land bank. (At the same time) they have to survive, they cannot let business come to a standstill.

"So I think for some of these, we will (need to) have a dialogue with the government . . . I think the government has the bigger picture. We leave it to them. They are trying their best. They want a stabilised market. We will cooperate with them."

Mr Kwek's comments come amid signs that the housing market is slowing down. Statistics from the Urban Redevelopment Authority (URA) showed that for the last three months of 2013, private home prices fell 0.9 per cent - the first quarterly drop in about two years. For the full year, URA's overall private home price index ended 1.1 per cent higher - a smaller gain compared with the 2.8 per cent recorded in 2012.

Besides working closely with the government to build a healthy property market, developers will also work closely with the government on the next phase of nation-building and real estate development to achieve a "distinctive, high-quality living environment for all", said Chia Boon Kuah, president of Redas.

This means that construction activity will remain at high levels and continue unabated for several years, making it "ever more important to re-focus our collective attention on workplace safety and welfare of the some 30,000 migrant workers in our industry", he said.

"As developers, we should support our contractors in showing duty of care for the health, safety and welfare of these workers. This enhances productivity, which, in the long run, translates into benefits for all."

Last month, a worksite accident in Sentosa left one foreign worker dead and 10 others injured.

The death of the worker takes the number of fatalities at worksite accidents to nine in just over a month, prompting Acting Manpower Minister Tan Chuan-Jin to write on his blog that the recent spate of accidents was "not tenable".

Developers and contractors should, therefore, "up the ante on workplace safety training and communication" and "recognise the contributions these workers make to our country", said Mr Chia, who is also group president and chief executive of developer GuocoLand.

Redas would hold a forum to identify and discuss common causes behind construction workplace accidents, challenges to risk reduction and best practices, he said.

Yesterday, Redas presented Mr Kwek with its inaugural Redas Lifetime Achievement Award, which it established to honour a pioneering group of industry leaders.

The Redas citation said that Mr Kwek has helped to shape the property industry and guided Redas through several difficult periods, such as the property crash in the early 1980s.

Together with other developers, he also helped to reform the sector by introducing the Developers' Fund to protect buyers. This ensured that money collected for a specific project could not be used for other purposes.

Mr Kwek received his award from Education Minister Heng Swee Keat, who was guest-of-honour at the event.