Melissa Tan | The Straits Times | Friday, Aug 02, 2013


Singapore’s property market has been achieving record prices recently. But it could soon face a turning point, a top official from the industry body said on Tuesday.

“We are approaching an important inflection point in the real estate cycle,” said Mr Chia Boon Kuah, president of the Real Estate Developers’ Association of Singapore (Redas).

Mr Chia, who is also chief operating officer at Far East Organisation, said property has “become a strong magnet as a store of wealth to investors and end-users alike”.

He said this was the result of high levels of liquidity and effectively negative real interest rates – that is, where inflation is higher than interest rates.

But risks remain in the Singapore property market, he told a Redas Property Prospects Update seminar held at Grand Copthorne Waterfront Hotel.

Mr Chia cited, for instance, a possible easing in monetary stimulus by the United States, leading to a rise in interest rates, and China recalibrating its domestic policies.

He also pointed to the pipeline of expected property completions here and the physical supply of real estate that will hit the market within the next four years.

“Against this backdrop of increased market volatility and a maturing real estate cycle, prudence and a long-term perspective are essential for the health of the property market.”

Mr Chia added that property developers would stay invested here, noting that the private sector invested $12.6 billion in sites released under the Government Land Sales (GLS) programme last year. This was up from $12 billion in 2011 and $10 billion in 2010.

International Property Advisor director Ku Swee Yong, another speaker at the Redas seminar, said that to stop home prices from continuing to grow, the Government should boost the available supply of completed Housing Board flats.

Public housing prices have risen at a faster pace than private housing prices, he said, adding that home prices have been rising despite a “patchwork” of cooling measures.

He noted that tightened foreign worker inflows have led to lengthier construction periods, meaning that HDB flats take longer to reach the market.

“Focus on physical, completed, available supply. It’s about TOPs (temporary occupation permits), not GLS or launches,” he said.

Mr Ku suggested that the Government temporarily allow construction firms to hire more foreign labour to complete HDB flats faster.

Other speakers at the Redas seminar included analysts from property consultancies DTZ, CBRE, Savills and Knight Frank as well as OCBC Bank.