REDAS hopes for fewer interventions in private property market

The Real Estate Developers’ Association of Singapore (REDAS) hopes that there will be fewer interventions in the private property market. Its president, Simon Cheong, said this would give a freer hand to market forces.

Speaking at the launch of the National University of Singapore’s national Residential Price Index, Mr Cheong said the recent measures to cool the market did not deter genuine home buyers and investors who have strong confidence in Singapore’s economy.

He urged buyers not to be too cautious as the current environment presents an abundance of opportunities.

Mr Cheong also took issue with the government’s reserve price system for state land tenders.

Citing the Ten Mile Junction mixed-use site as an example, he said the bid of S$162 per square foot per plot ratio failed in April 2008. However, it was awarded in February this year for S$437 per square foot per plot ratio, or 2.7 times higher.

Simon Cheong, president of REDAS, said: “The higher bid prices generated more revenue for Singaporean state coffers but also accentuated the demand-supply mismatch.

“Had the two sites along with other tenders been awarded back then at “market prices”, the current demand-supply mismatch scenario in the residential market may have been more smoothened and price increases for such mass market projects more muted overall.

“With a higher land cost, these developers must now sell at higher prices, just to maintain an equitable level of profitability.”

Source : Channel NewsAsia – 24 Mar 2010

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