S'pore property developers face govt cutback measures<\/p>\n
SINGAPORE (Reuter): Singapore property developers, faced with
\nan oversupply of housing, have been given a slight reprieve by
\nthe government's move to cut back its land sales program,
\ndevelopers and property analysts yesterday.<\/p>\n
The government said on Wednesday it would supply land for
\n5,000 private homes in 1998, down from 7,000 this year.<\/p>\n
Minister for National Development Lim Hng Kiang said the
\nfigure was in line with the government's medium-term target of
\nreleasing land for an average of 6,000 private homes a year.<\/p>\n
Analysts and developers said the cut back in 1998 provides a
\nmuch needed boost to the mood in the property market, but would
\ndo little to address the oversupply in the medium term.<\/p>\n
\"It is better than expected. Developers are sitting on top of
\nthe world,\" said Ong Choon Fah, a director of real estate
\nconsultant Edmund Tie & Co.<\/p>\n
\"It is a real relief to developers. The immediate impact is
\nmore psychological than real, but the cuts should stem some of
\nthe 'dead sentiment' in the market,\" said a director with a major
\nlisted developer, who declined to be named.<\/p>\n
Analysts said the cutbacks in the land sales program probably
\nhad more to do with the government's concern with the regional
\nfinancial turmoil rather than aggressive lobbying by developers
\nfaced with an growing mountain of unsold new homes.<\/p>\n
\"The regional financial turmoil is having a real impact on
\nsentiment. People are less willing to invest, whether it be
\nproperty or shares, so the demand is just not there,\" said one
\ndeveloper.<\/p>\n
The government estimated that annual demand for private homes
\nfrom middle-income families is about 10,000-12,000 units a year.
\nBut analysts said the take up rate for this year would be closer
\nto 6,000.<\/p>\n
Ong said it was a \"safer route\" for the government to scale
\nback its land sales program because of the uncertainties created
\nby the regional plunge in stocks and currencies.<\/p>\n
But the fact remains that developers still have a huge
\nstockpile of new homes.<\/p>\n
Ong estimated that 21,000 new homes could become available
\nbetween the second half of 1997 and the end of 1998. This was on
\ntop of the 15,000 unsold homes at the end of June, according to
\ndata from the Urban Redevelopment Authority.<\/p>\n
Lim Chung Chun, an investment analyst with ING-Baring
\nSecurities, said there would be no change in the supply situation
\nin the near term and the cutbacks would only be felt in late 1999
\nat the earliest.<\/p>\n
\"The cuts will not address the demand\/supply imbalance in the
\nshort to medium term. Sentiment would be boosted, but probably
\nnot enough to cause a recovery in the physical market,\" he said.<\/p>\n
Ong said she did not expect \"fire sales\" from developers to
\nclear their stock, but they would continue to give indirect
\ndiscounts, like free renovations, to move the market.<\/p>\n
She said of the 6,800 new homes launched in 1997, about 80
\npercent was supplied by five large developers.<\/p>\n
\"They are experienced and have considerable holding power.
\nThey will have to make adjustments to move the market, but it
\nwill be in a measured way.\"<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/spore-property-developers-face-govt-cutback-measures-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}