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Thread: Leng Beng muses on govt's market cooling options

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    Default Leng Beng muses on govt's market cooling options

    http://www.businesstimes.com.sg/sub/...45927,00.html?

    Published August 14, 2009

    Leng Beng muses on govt's market cooling options

    Scrapping IAS, reviving confirmed list possible, but care is needed

    By KALPANA RASHIWALA


    (SINGAPORE) City Developments Ltd's (CDL) executive chairman Kwek Leng Beng reckons that the government may abolish the interest absorption scheme or reintroduce land sales through the confirmed list if it is concerned about a property bubble building up.

    However, the authorities will deliberate carefully before introducing any measures to cool the market, given the government's cautious economic outlook for the second half, Mr Kwek said yesterday.

    'In an uncertain time, you press the wrong button, (it may be) disastrous. I'm a strong believer that whatever the government wants to do, I think they've got to think very carefully - and they will,' Mr Kwek said in response to an analyst's question during CDL's Q2 results briefing yesterday.

    National Development Minister Mah Bow Tan last month observed that there are signs of speculation in the property market, and said that the government will act if it overheats. He also urged home seekers to buy only within their means.

    The minister's comments followed a strong pick-up in private home sales, with queues forming at some property launches and developers raising prices for some projects.

    Yesterday, Mr Kwek noted that while 'some amount of speculation is good for the market, excessive speculation can lead to disaster'. Like some other developers, he argued that the resurgence in housing sales 'should not be viewed as over-exuberant or extraordinary, bearing in mind that developers had put on hold many launches last year'. He also said that 'to-date, property prices for the low and mid-tier market have yet to recover since its peak of 1996' - a point on which some market watchers begged to differ.

    Mr Kwek attributed the strong home sales seen in the market in the first-half of this year to pent-up demand; developers' willingness to trim prices to more realistic levels to move stock; low interest rates on home loans and fixed deposits; and property remaining a good hedge against inflation; among other factors. 'Moreover, foreign investors are slowly returning to Asia, with increased confidence in its prospects.'

    He acknowledged that the fast pace of recovery in overall market sentiments had taken even him by surprise.

    In its results statement, CDL said that it has 'always advocated that property investors should take a medium to long-term perspective and be able to service their loans'. It added: 'With all the readily available statistical data about the property market and its transactions, home buyers today are more savvy and far-sighted, and they should be able to make discerning decisions about their investments.'

    Last October, amid the global financial crisis, the government suspended sales of sites through the confirmed list - under which land parcels are launched for tender according to scheduled dates. However, sites remain on offer through the reserve list, under which the state will launch a plot for sale only upon successful application by a developer which undertakes to offer a minimum price acceptable to the state. In his pronouncement on the private residential market in late July, Mr Mah said that the government is considering whether it should reintroduce the confirmed list for first-half 2010.

    In October 2007, the government scrapped the deferred payment scheme (DPS) amid complaints that it had fuelled property speculation. However, the now-popular interest absorption scheme (IAS) that is being offered by developers and banks mimics DPS in that buyers do not make any payments beyond the initial 20 per cent until the project is completed. However, IAS buyers have to sign up for a bank loan immediately and hence undergo a credit assessment for better risk management.

    Mr Kwek yesterday was enthusiastic about the Urban Redevelopment Authority's survey to establish lifestyle needs and trends here. Singapore will have 'a different platform when the two integrated resorts are ready', he said, as they will attract different types of customers, some of whom will want to buy residential property in Singapore, citing the experience in Macau.

    The luxury residential market here will recover 'when the casinos open and are performing reasonably well, and the world economy is more or less recovered to a good extent', he added.

    The increase in overseas visitor arrivals expected to be generated from the IRs' casinos and the conventions business is also expected to create spillover demand for other hotels on the island.

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    http://www.straitstimes.com/Money/St...ry_416516.html

    August 14, 2009 Friday

    Property scene not too frothy: CDL

    Resuming regular land sales is what Govt may do if there is over-exuberance

    By Robin Chan


    PROPERTY tycoon Kwek Leng Beng believes the Government may try to cool the property market - if it gets too frothy - by resuming its regular land sales programme as a way to boost supply.

    However, the City Developments (CDL) chairman also said yesterday that the current buying momentum can be sustained and should not be seen as over-exuberant.

    He was speaking at a press conference during which CDL unveiled its second-quarter results - another weak set of figures.

    Mr Kwek said the recent resurgence in property sales should be put into context.

    'It should not be viewed as over-exuberant or extraordinary, bearing in mind that developers had put on hold many of their launches in 2008,' he said.

    He added that property prices for the low- and mid-tier market had yet to recover since their peak in 1996.

    In response to a question on whether the Government would introduce any cooling measures, he said: 'I think Mr Mah (Bow Tan) is correct to say he doesn't want a bubble to be built, but I don't know if he is going to introduce (any measures).

    'Probably what he would do is offer a confirmed list. The deferred payment scheme has already been abolished. Maybe he will abolish interest paid for on behalf of the buyer.'

    Mr Mah, the Minister for National Development, warned on July 29 against a property bubble forming and speculation creeping back into the market. He vowed to 'take whatever action is necessary'.

    Mr Kwek said the Government would have to approach this decision carefully.

    'Don't forget that the Government's statement is that the market is still uncertain. In an uncertain time if you press the wrong button, it will be a disaster. I'm a strong believer that whatever the Government is going to do, they have to think very carefully and they will,' he said.

    With a confirmed list, sites are put up for tender at scheduled dates, regardless of developers' interest. It is a way of forcing supply into the market.

    The Government suspended confirmed list land sales last October, but Mr Mah has suggested that it could be reintroduced in the first half of next year.

    The interest absorption scheme allows buyers to defer the bulk of their payments until their units are completed.

    Mr Kwek said that the low property prices in the market were a result of developers being realistic.

    He added: 'I am always afraid to encourage people not to buy, because especially in a low market, if you encourage not to buy and the market goes up, they lose the opportunity of buying cheap.

    'If you are smart, you make money; if you're not smart, you speculate, you lose your pants. Nobody in this world can really predict whether the market is going up or down.'

    He said property investors should take a medium- to long-term perspective.

    Mr Kwek said that he hoped to resume construction of CDL's stalled South Beach project as soon as practicable, adding that it would probably be in the third quarter of next year and be completed before 2016.

    He added that CDL and Hong Kong property group Nan Fung, the newest investor in the consortium, would be willing to pump more money into the project should the need arise.

    The $2.5 billion project, originally slated for completion in 2012, had been delayed by the financial crisis.

    Mr Kwek said the other two Middle Eastern partners, El-Ad and Dubai World, had other priorities.

    Under the terms of the agreement with the Government, the consortium has till 2016 to complete the project.

    Mr Kwek said that the partners are on very good terms, but that CDL is taking the lead and has Nan Fung's support.

    He added that people have asked if the other partners want to sell their stakes in the project, but the other partners, so far, have not indicated to him that they want to.

    CDL's second-quarter net profits were down 15.3 per cent from the same period last year to $140 million as hotel occupancies kept falling. Revenue edged up 0.8 per cent to $787 million.

    For the first half, net profits sank 32.4 per cent to $223.1 million as revenue fell 8.4 per cent to $1.41 billion.

    One positive trend: net profits shot up 68.3 per cent from the first quarter, in line with a gradual global recovery.

    The group's net profits do not include valuation differences arising from investment properties.

    Revenue for the second quarter was split almost evenly between hotels and its property development and rentals segments.

    Revenue from hotels was hit bad, dropping 25.2 per cent to $364.5 million in the second quarter from the same period last year. Occupancy rates had fallen across Asia, Europe and the United States.

    However, CDL was able to realise profits from beginning the construction of The Arte @ Thomson last year even before its launch in March this year.

    Earnings per share for the three months was down 16 per cent at 14.7 cents over the same period last year. Net asset value per share was $6.18 as at end-June, up from $5.97 as at Dec 31.

    Net borrowings stood at $3.35 billion at end-June, down from $3.36 billion as at March 31. CDL shares closed 19 cents or 1.9 per cent higher at $10.02 yesterday.

    [email protected]

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    Aiyah, he know cheng hu will not dare to repeat 97 mistake.

    Anyway all the cheng hu tools all so blunt, how to cool the mkt?

    So he yaya papaya um-chio at cheng hu lor.

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    Quote Originally Posted by sabian
    Aiyah, he know cheng hu will not dare to repeat 97 mistake.

    Anyway all the cheng hu tools all so blunt, how to cool the mkt?

    So he yaya papaya um-chio at cheng hu lor.
    Yea, then the media also joined in by coming up with such a title for this article. Normally they not so daring

    But it benefits him by saying saying things also lah.

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    Quote Originally Posted by dunatos
    Yea, then the media also joined in by coming up with such a title for this article. Normally they not so daring

    But it benefits him by saying saying things also lah.
    Maybe Kwek and Mah can't see eye to eye?

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    Quote Originally Posted by Property_Owner
    Maybe Kwek and Mah can't see eye to eye?
    how to see eye to eye ??

    Mr Mah is 5 foot nothing .. i am sure My Kwek is taller

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    Quote Originally Posted by proud owner
    how to see eye to eye ??

    Mr Mah is 5 foot nothing .. i am sure My Kwek is taller

    This reminds me of my RSM, I'm 6 foot 2'', my RSM 5 foot nothing too.....
    Talking to him makes me feel like talking to my son

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    Quote Originally Posted by Property_Owner
    This reminds me of my RSM, I'm 6 foot 2'', my RSM 5 foot nothing too.....
    Talking to him makes me feel like talking to my son
    that also reminds me of a PC in my company ..he is shorter than 90 pct of the company ..

    one day , a recruit walked past him

    he stopped the recruit and looked up to him and shouted .." you cannot see my rank is it ?"

    hahahha

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    Sorry sir, did not see you sir. If I saw you sure greet you SIR! Good Morning SIR!

    Quote Originally Posted by proud owner
    that also reminds me of a PC in my company ..he is shorter than 90 pct of the company ..

    one day , a recruit walked past him

    he stopped the recruit and looked up to him and shouted .." you cannot see my rank is it ?"

    hahahha

  10. #10
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    Quote Originally Posted by proud owner
    that also reminds me of a PC in my company ..he is shorter than 90 pct of the company ..

    one day , a recruit walked past him

    he stopped the recruit and looked up to him and shouted .." you cannot see my rank is it ?"

    hahahha
    They would always says this when they need to brief the guys

    '' Front row squad down, 2nd row bend over, I will brief your guys..............''

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