Necessary measures to keep developers on the straight and narrow

DEVELOPERS' profit margins may be squeezed with rising land prices - and the government appears to worry they may compromise on two fronts, going by its recent moves and hints of upcoming measures.

Rising land prices is not the developers' only headache. They also have to sell their projects fast - within five years of the land purchase, or incur additional buyer's stamp duty on land cost.

The developers may therefore max out the number of units they can build on a site. They do this by building more small units, which can be sold quickly because their selling price is lower. The errant developers may also cut corners on construction quality to save costs - all this at the peril of homebuyers' living standards or even safety.