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Cooling measures make it harder to clear new housing stock: Redas
THE nearly 46,000 private residential units that could become available for sale in 2019 and 2020 would take about five years to be absorbed by the market - and this is barring unforseen circumstances.
Augustine Tan, president of the Real Estate Developers' Association of Singapore (Redas) said this on Wednesday at the association's annual mid-autumn festival lunch.
"With the new cooling measures, it'll be harder (for developers) to offload new units... as they have become more expensive to buy, especially from the second and third units onwards, and also for foreigners," he told The Business Times by phone after the event.
Developers will therefore have to differentiate their projects, and to design them with the needs of the buyer in mind, he added.
"We've got to work harder, in short. Certainly, pricing will be a factor as well and we'll have to price more sensitively," he said.
This state of affairs follows the cooling measures imposed on July 6, which "bewildered" the market and caused an about-turn from the pick-up seen early this year.
"The new cooling measures have indeed weakened market sentiment and demand as they raised the barrier for entry for all categories of buyers - from first-timers to investors and foreign buyers," he said in his speech.
He added that developers are also being more prudent about their purchases of land and their capital allocations. He said in his speech that there are also "bright spots" in other property sectors, such as the office sector, where sustained demand from, for example, the IT, fintech, energy and co-working space sectors is fuelling a good take-up rate.
Meanwhile, the downward pressure on the retail market is easing, as retailers are adapting to the changing expectations of customers.
In the industrial market, rents and prices have "remained stable on the back of sustained leasing activities and limited supply coming onstream".
At the Redas event, Second Minister for National Development and guest of honour Desmond Lee reiterated the government's rationale for the cooling measures - to "keep prices in line with economic fundamentals".
"As acknowledged by Redas, a large supply of private residential units is coming onstream and interest rates are going up. To avoid a severe correction later, which can have a more destabilising set of consequences, we decided to act earlier to maintain a stable and sustainable property market."
Mr Lee, who is also Minister for Social and Family Development, also urged corporates to help the needy in Singapore, alongside government agencies and volunteer welfare organisations.
"As social needs grow in complexity, we need to look ahead and galvanise a whole-of-society approach to support and uplift individuals and families who may need more help."
Eight developers now provide 145,000 sq ft to house social service organisations under the Community and Sports Facilities Scheme (CSFS). The largest of these sites is in CapitaLand's Bishan Junction 8, with almost 54,000 sq ft.
Companies can also can set up and run programmes in white spaces at social service hubs that the Ministry of Social and Family Development (MSF) will set up in some rental housing precincts; this is so that employees of these companies can volunteer by giving tuition or running reading programmes at the hub near their workplace.
"This hub as a whole, comprising a range of organisations from governmental to charitable to corporate, will proactively reach out to the residents... and work with them, journey with them," he added.