Redas must take long-term view of market

The call by the Real Estate Developers' Association of Singapore (Redas) to ease some of the property cooling measures is understandable, from the developers' perspective ("Time to ease property curbs, say developers"; last Friday).

However, while individual developers may take a short- or mid-term view in their business, Redas must take a longer-term view of Singapore's property market and be a responsible national body to ensure the long-term sustainability of the real estate market, which, in turn, affects the lives of Singaporeans.

Property loan tenures used to be 20 years, but have now been extended to 30 years because of the high prices of properties, which far exceed our incomes.

The first generation of home buyers had affordable prices and did not need to spend so much of their incomes and savings on properties.

At current prices, it would be a challenge for the majority of upgraders to be able to retire comfortably when they reach retirement age.

With the market still filled with liquidity and interest rates low, it is certainly not the right time to ease any cooling measures.

Prices in the Outside Central Region are still elevated, and have fallen by only about 8 per cent from their peak. This is small, compared with the 60 per cent rise in prices since 2009.

For Singapore to remain competitive globally, asset prices and rentals must come down to sensible levels.

With lower rental and business costs, businesses will have some chance to survive and continue to drive our economy.

Singapore needs to seize this opportunity to bring down asset prices and restructure our economy for the next 50 years.

We must take the bitter pill, even if some property developers may find it a challenge to remain in business.

Patrick Tan Choon Hong

A version of this article appeared in the print edition of The Straits Times on February 22, 2016, with the headline 'Redas must take long-term view of market'. Print Edition | Subscribe