Last Wed (11 Dec), City Developments CEO Sherman Kwek who is the son of property tycoon Kwek Leng Beng told Bloomberg in a report that the present property glut is an effect of government policy that imposes a levy on firms that do not complete construction and sell all units within five years of acquiring land.
Under a ruling, property developers have to build and sell all residential units built within five years to qualify for remission of the Additional buyer’s stamp duty (ABSD) on the land purchase price. If they fail, they will have to pay the 25 per cent ABSD, with interest. The remissible ABSD for residential developers was raised to 25 per cent, up from 15 per cent, for land purchased from July 6 last year.
The Urban Redevelopment Authority said there were around 32,000 unsold private residential units as of 30 Sep.
In the interview, Mr Kwek said extending the ABSD 5-year deadline would allow developers to stagger sales launches and ensure “better balance between demand and supply”. But property experts said that extending the deadline for developers may not address the flagging buyer demand in the market.
Mr Kwek wanted the government to lengthen the 5-year deadline to seven or 10 years so as to reduce pressure on developers and prevent the worsening of the supply glut.
Burdened with high land cost
In a letter to ST Forum today (17 Dec), Mr Kwek further clarified his position. He reiterated that extending the 5-year deadline would ease the current supply glut, but said that the greater concern is rising home prices.
“Singapore has witnessed record prices over the past two years for condominium projects. Given a choice, many developers would prefer to sell at a lower price, ensuring a comfortable sell-out rather than test new benchmark prices,” he said.
“What is the cause? Developers are burdened with high land cost and have little buffer. Why is land cost high? When the market started to recover in 2017 after a four-year slump, most developers were low on land and had to compete fiercely to replenish their land banks.”
He explained that a developer cannot stop bidding for land, “Land is our primary raw material. Just like the manufacturing industry, we cannot afford to run out of raw materials as it would have an impact on the company’s operations and ultimately jobs may be affected.”
He argued that extending the deadline by a further 2 years would provide more flexibility to developers so that they can have the option to launch immediately or delay the launch by several months to a year. “This will potentially avoid exacerbating a market that may already be overwhelmed with supply,” he said.
“More importantly, it will stagger launches so developers don’t all run out of land at the same time and have to bid furiously to replenish their land bank.”
Mr Kwek also made another suggestion asking the government to pro-rate the penalty in accordance to the number of remaining unsold units. He argued, “It doesn’t make sense to penalise a developer which has only five unsold units with the same hefty penalty of 31.25 per cent of total land price as one which has 500 unsold units by the five-year deadline.”
“Tweaking the ABSD timeline and pro-rating penalties can help contain rising housing prices by ensuring developers don’t run out of land at the same juncture, thus moderating land prices. This provides for a more stable and sustainable property market, which augurs well for the social fabric of Singapore,” he concluded.

Notify of
Inline Feedbacks
View all comments
You May Also Like

系统竟显示“已投票” 少妇报警

投票时扫描器显示自己已投票,少妇向工作人员反映,获得“蓝色选票”进行投票,事后方知蓝色选票并非正式投票,只是协助后续调查,决定报警处理。 36岁的林女士于投票日当天中午12时许,带着两名孩子和丈夫到锦茂连路住家附近的第23A座投票站,投选荷兰-武吉知马集选区候选人。 她表示,基于当时带着孩子,所以被工作人员安排到优先队伍进行投票,但是在扫描身份证时,扫描机器的屏幕显示“警告”的红色字眼,尝试多次都无法成功投票。 当时有工作人员帮她手动输入身份证号码,却发现已有人使用该身份证号码投票了。 林女士强调当时还未投票,且没有遗失过身份证,因此怀疑是电脑系统出了问题。“工作人员问我是不是想投票,接着就让我签一张宣誓书,证明我是身份证持有人,给了我一张蓝色选票。” 投票后,她才被工作人员告知,有关蓝色选票并非正式投票,不会被纳入选票内,只是为了当局的事后调查。 数次查询盼能够投票 她回家后立刻拨电向选举局做出反馈,当局表示首次遇到类似情况,因此促请林女士报警。 林女士在作出反馈后,希望当局能够尽快处理,因此在两个小时后回到投票站,但是被拒绝投票。她之后于傍晚5时再次拨电选举局,但是当局表示尚在调查情况,因此依然不能让她投票。 她指出,她并非新选民,曾经投票两次,却没想到这次会遇上这样的问题。“以前手动点名都没有出现问题,这次电脑扫描确有问题,选举局也没有预备第二方案。如果是电脑系统出现差错,不知道其他地方的投票站会不会出现相同问题。” 林女士使用的蓝色选票,并非正式选票,属于重复选票(Tendered Ballot…

曾代表前进党打义顺 卡拉称党籍已终止

2020年大选,卡拉(Kala Manickam)曾偕同团队披前进党战袍攻打义顺集选区,不过她在昨日(12日)宣称,本身的前进党党籍已在去年12月31日终止。 她称自选举来发现党内的不足,也尽责第向党管理层反映,但屡屡遭忽略。 她表示,导致她决定离开的“最后一根稻草”,是前进党其中一位“知名成员”在冠病议题上发表错误信息。“再一次, 我的反馈被忽略,也未看见该党对这位成员采取行动。” 卡拉不认为前进党针对冠病议题诸如疫苗接种、口罩、社交安全距离、经济重开来等,有公开表达立场。 据了解,前进党中委阮健平告知《8视界》,卡拉已不再是前进党党员,也不会针对后者终止党籍原因置评。 目前本社尚在等候前进党方面针对此事的正式声明。

MINDEF refutes claims that acquisition of F-35 fighter jets by RSAF is to align itself with US

The Ministry of Defence (MINDEF) stressed that the acquisition of F-35 fighter…

Adopt a painting at the first solo exhibition of 80-year old Singaporean painter Johnny Wong at Coda Culture

80-year old Johnny Wong has loved art and has been painting since…