Property developers should not be granted extensions on unsold units

I support the Government's ruling imposing extension fees or penalties for all residential units remaining unsold beyond the stipulated period ("Pressure mounts over unsold units"; Feb 19).

A developer has five years to finish building and two more years to sell all units. This specific condition is stipulated in tenders and has been unconditionally accepted by all bidders for state land.

Furthermore, all bidders and developers have taken a view of future market trends and have done all due diligence and calculations on construction costs, risks, demand and other commercial considerations before submitting their bids.

To grant extensions is unfair to all bidders involved in the original tender.

 

Furthermore, government land sales are meant to provide a progressive supply of housing units to meet the projected demands of the public, and not for developers to hoard units until the property market's next cycle.

Otherwise, developers will bid low when the market is bad, commence construction when costs are lower in a bad market, hold back the launch/sale and then sell the units beyond the seven-year period at high profits, thereby frustrating the Government's private/public housing supply schedule.

Likewise, developers who have bid high prices for state land will likely hold off on selling their units in anticipation of higher profits.

Developers should abide by the original tender terms and conditions.

Sum Kam Weng