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Redas president warns of repercussions of property cooling measures
Cooling measures by the government, if left unchecked, could lead to unintended downward spiralling of property prices, warned Augustine Tan, president of the Real Estate Developers' Association of Singapore (Redas).
Already, private housing completions from the last few years of ramp-up in government land sales are presenting "a worrying oversupply scenario" that is likely to bring the vacancy rate to a new high, he said.
Just three weeks into his newly appointed role at Redas, the executive director of property sales at Far East Organization painted a gloomy picture of the Singapore property market at the Redas Spring Festival luncheon.
"Analysts estimate that over 75,000 new private residential units will be completed from 2015 to 2019. This looming supply is likely to bring home vacancy rate to a new record high," Mr Tan said.
"This will cause a further slip in home rentals and downward spiralling of property prices," he warned. "For homeowners, their investments will be severely impacted...Some may be forced to sell their properties."
Mr Tan pointed out that the government, working on its own, may not be able to manage precisely the rate of decline in prices to arrive at a level that is deemed desirable for a stable property market.
On that note, he hopes that the government's macro and prudential measures will be calibrated over time, through a public-private sector collaborative effort in understanding the situation.