Property developers need to adjust their prices and expectations to reflect prevailing market conditions if they wish to attract buyers and average their holding costs, instead of keeping to their originally projected prices and cash flow projections from several years ago (CapitaLand calls for more time to sell units; March 14).
Under current rules, developers must sell all units on private residential land within two years of obtaining the Temporary Occupation Permit, failing which they will have to pay extension charges, pro-rated to the proportion of unsold units.
If developers are given two more years, it will mean them having four years to sell all the units.
Developers may take advantage of the extension to hoard units and create pent-up demand.
The Government should not grant the extension that is being asked for.
An exception can be made for developers who had bought land that was sold en bloc.
In all other scenarios, developers must keep to their construction schedules so that the Government and the public can reasonably predict future public and private housing supply and thus mitigate the danger of a property bubble developing.
Sum Kam Weng