Time for government to review Qualifying Certificate policy again: CDL's Kwek Leng Beng

CITY Developments' executive chairman Kwek Leng Beng once more called for the government to ease land-banking measures for property developers, even as residential prices seem to recovering.

Asked at the group's results briefing for his thoughts on the Singapore property market and recent aggressive prices paid in government land tenders, he reiterated his stance expressed in the media release, where he had said: "We remain hopeful that the Qualifying Certificate (QC) policy can be reviewed in due course, so that developers can look towards both government land sales and private sales for land replenishment and avoid a dangerous upward spiral in land cost and property prices that is not in line with the growth of the economy."

At the briefing at M Hotel at Tanjong Pagar, he said a review is needed "in order to steady the rate of growth" in price increases. He compared land to raw materials used in manufacturing. "When you don't have the raw material, you want to let your whole factory do nothing? Therefore you have no choice but to go and bid for the land. Yet, if you bid for the land cheaper because you think it's the right price, you will get nothing.

"We have to watch out. If the prices keep going up, this is not good. What we want and what we have been told correctly so is that prices need to be growing in accordance with the economic growth... If the economy grows better, we should see better prices...

"It is my hope that the government will look into this again because at a certain point of time, especially now, many countries are just beginning to see the booming situation (in their home property prices), (and they have) just introduced measures of control. But we have been looking at it since 2008 at the peak of the market. Our scenario, our cycle is different, so we have to be looking at it from a different angle."

He also believes that political uncertainty in the world will help to temper property prices. He believes that if the QC policy is removed, prices may rise for a while, but rationality will soon take over, and developers will become less aggressive in their land bidding behaviour.

"I think what we observe (a possible jump in land prices) can be a temporary reaction, but if you sit down and start to think about it, you will realise that since you can land-bank, you don't need to be so frightened that pricing will go through the roof," he said.