The Real Estate Developers’ Association of Singapore’s (REDAS) new president Chia Ngiang Hong on Tuesday suggested ways property curbs on the private housing market could be more targeted, and called for more dialogue between the government and stakeholders in policymaking.
Mr Chia, who is also the group general manager of City Developments Limited, was speaking at the industry association’s spring festival lunch attended by some 700 people. Finance Minister Heng Swee Keat was the guest-of-honour.
He suggested some flexibility in terms of the timeframe needed to sell out projects when it came to the remissible additional buyers’ stamp duty (ABSD) for developers.
As at July 6, the remissible ABSD for residential developers – which used to be 15 per cent – has been jacked up to 25 per cent. If a developer fails to complete the residential project as well as sell all its units within five years of acquiring the site, it will have to cough up the 25 per cent ABSD with interest.
Developers now also have to pay a 5 per cent non-remissible ABSD when they buy residential development sites (including collective sale sites).
Mr Chia said that the land ABSD has “pushed all developers to exhaust their inventory at around the same time, and could partly account for the land price escalation in 2017 and 2018 because everyone basically ran out of inventory at the same time”.
He said: “If the land ABSD is not reviewed, we can expect a repeat of the 2017–2018 ‘land grab’ situation in four to five years’ time. When the price of the raw material goes up, we can expect the price of the end product to increase as well.”
Mr Chia also said it may be timely to re-evaluate the loan-to-value ratio for first-time property purchasers and review the timing of the upfront payment of the ABSD for upgraders.
He said he believes that “open communication and constructive and meaningful feedback between the government and stakeholders will allow for a more robust policymaking process”.
“Although the government formulates public policies, we believe that the private sector can contribute to help make policies better and more targeted,” Mr Chia said.