All property stakeholders urged to avoid stoking sentiment

Singapore

ALL participants in the property market have a role to play in not stoking exuberant sentiments.

Making this call on Tuesday, Second Minister for National Development, Indranee Rajah, said: "We all have a part to play by continuing to be professional, responsible and prudent... In the long run, a stable property market will benefit all stakeholders."

Speaking at the spring festival celebration of the Real Estate Developers' Association of Singapore at The Fullerton Hotel, Ms Indranee also urged prospective property buyers to be mindful of their ability to service mortgage obligations, given the uncertain economic outlook and the protracted recovery in the domestic labour market, before making long-term financial commitments.

Agreeing, Ong Choon Fah, chief executive of Edmund Tie & Co, said when contacted by BT: "All the stakeholders including property agents have a role to play in advising buyers so that they can make responsible purchases - taking into account their risk profile.

"Moreover, as buying a property can be a complex process with various regulatory requirements, agents should ensure that they are knowledgeable to advise on the respective areas of expertise. If they are not, they ought to refer buyers to the relevant professionals such as lawyers and bankers."

Ms Ong said that buyers, too, need to do their own homework and evaluate their decision, and not be swayed by the fear of missing out. "What we want is a sustainable property market supported by sound fundamentals."

Ms Indranee, in her speech, also urged developers to remain prudent in their land bidding and not overextend themselves financially.

She noted that the property market has a direct impact on the lives and aspirations of Singaporeans.

The recovery in global economic activity is expected to be uneven, uncertain and drawn-out. "How the global economic and pandemic situations pan out and the ongoing uncertainties may affect Singapore's economy, including our labour and property market. So we do have to remain vigilant," she added.

The Urban Redevelopment Authority's private home price index rose 2.1 per cent quarter on quarter in Q4 2020, after having risen 0.8 per cent in Q3 2020. Full-year 2020, the index was up 2.2 per cent, following a 2.7 per cent increase in 2019.

The Minister noted that the pandemic is resulting in a relook at how Singapore is planned and built.

She cited the example of many companies adopting flexible work arrangements. "With more people working from home, we can expect changes to their commuting, retail consumption and lifestyle patterns. So sometimes, people ask us: 'When can we go back to before?' There is no going back.

"I don't think we'll ever go back to quite the way it was before. What's very likely to happen going forward is that there will be a hybrid, or a new form of working.

"So some of the changes are short-term, but others are going to be permanent structural shifts, and we have to be responsive. And we cannot do this alone, so we do need the support of the industry and the community."

In her speech, Ms Indranee also touched on how the pandemic has shown the importance of building resilience, and that Covid-19 can be expected to be around for some time, even amid challenges on other fronts such as climate change. "It is critical that we prepare ourselves and be well-placed to tackle these challenges. Accelerating the transformation of our entire built environment sector to improve productivity is a key part of this."

She cited the example of enhancing coordination through the use of more digital tools to bring together the entire building life cycle and its various parties, covering design, construction and facilities management from end to end. "This will allow us to build and maintain our city more effectively and sustainably."

Ms Indranee also referred to Deputy Prime Minister and Finance Minister Heng Swee Keat's Budget speech last week, when he shared about the launch of the new Growth and Transformation Scheme for the built-environment sector.

This will require developers to work closely with their consultants, contractors and suppliers to level up as an ecosystem or value chain, given the interconnected nature of construction.

Redas president Chia Ngiang Hong, in his speech, said the organisation will continue to work closely with the government and relevant stakeholders to encourage an informed and collaborative approach to advocacy and capacity-building, to support investments in green R&D/innovation and to incentivise mass adoption by developers and their value-chain partners and stakeholders.

"As such solutions are capital-intensive and need time to crystallise, the government's continued assistance to the built environment is very important and we hope for the understanding and consideration to 'adjust policies if necessary, to maintain a stable and sustainable property market in the long run'. It is very crucial indeed.

"As developers, we remain concerned about the global economy, which remains fragile and could be a hostage to downside risks... Redas fully supports the need for the property market to remain resilient to economic downturns, property bubbles and external shocks like the pandemic and that 'prices move in line with the economic fundamentals'."