Time to consider easing property cooling measures, says Redas chief Augustine Tan

Aerial view of private residences and HDB flats near Tree House condominium.
Aerial view of private residences and HDB flats near Tree House condominium.PHOTO: ST FILE

SINGAPORE - The head of Singapore's property developers' body said it is timely to consider a calibration of the cooling measures, which has successfully brought down the number of transactions and home prices.

"With safeguards in place such as the continuation of the prudent TDSR (total debt servicing ratio) measures together with the current economic situation, properly prices will be kept in check," said Mr Augustine Tan, president of the Real Estate Developers' Association of Singapore (Redas).

Speaking at the association's annual Spring Festival reception on Thursday (Feb 18), he said there is an "urgent need"  for action to bring stability and ensure a soft landing in the property market, "to prevent further damage to the fragile economy".

He said the real estate market is reeling from the compounding effects of an oversupply situation, rising vacancy rates, weak demand and increasing interest rates amid economic challenges.

"Furthermore, should the ongoing volatility of the stock market persist, which is a real risk, this could severely impact the property market, " Mr Tan added.

He noted that as at the end of last year, there is a supply of over 60,000 units in the pipeline and a record 26,500 vacant units.

In addition to the growing supply, pressures loom for developments affected by the Qualifying Certificate scheme (QC) and additional buyer's stamp duty (ABSD) .

He said some 700 unsold units across 13 developments will be affected by QC in 2016, with estimated charges amounting to close to S$100 million.

"The kick-in at end 2016 of the ABSD remission claw-back for developments with unsold units will put further pressures on prices, " Mr Tan said.

Currently, about 6000 units remain unsold in 33 developments, excluding executive condominiums, which will be impacted by the ABSD remission claw-back in 2017 and 2018, ha added.