Developers should target lower profit margins

A HDB block in Toa Payoh Lorong 7.
A HDB block in Toa Payoh Lorong 7.PHOTO: ST FILE

The Government should stand firm on the property cooling measures that were introduced last July (PropNex calls for easing of curbs for HDB upgraders, March 15).

These measures, which serve to keep housing prices in line with economic fundamentals, restrain increases in cost of living and improve the quality of life, are positive and well supported by Singaporeans.

The recent collective-sale frenzy has not been beneficial for Singapore. Developments like The Gazania and Treasures at Tampines have more than tripled the number of units built on the same plot of land.

At the same time, a large majority of these units are smaller than a Housing Board four-room flat, and are being offered at very high per-square-foot prices.

This lowers the quality of life for Singaporeans as it forces people into increasingly smaller, less liveable apartments at higher prices.

While developers claim these high prices are due to the high land prices they paid, the reality is that they are still aiming for double-digit profit margins.

If PropNex truly cared about upgraders, it should call for developers to target lower profit margins and pay normal commissions to property agents, passing on the savings to consumers, instead of asking for cooling measures to be relaxed.

The constant requests by industry players to relax the cooling measures reinforce only the self-serving image of the industry in the eyes of the public.

Jeremy Teo Chin Ghee (Dr)

A version of this article appeared in the print edition of The Straits Times on March 20, 2019, with the headline 'Developers should target lower profit margins'. Subscribe