Kwek Leng Bend, a long time veteran as a property developer, has shown concern that Singapore may lose its reputation as being a go to place for investment opportunities if the Government does not review the property cooling measures put in place almost a year ago.
Mr. Kwek is the executive chairman of Hong Leong Group Singapore and City Developments. He has stated that foreign investors were now putting most of their investment dollars into countries such as the US, Australia and Britain rather than Singapore. And Singapore natives have been making their investments abroad. Kwek further adds that they are losing investments to these other countries even though there is a higher risk profile on these foreign properties. In an interview with The Stratis Times, Mr. Kwek stated that he feels it is not likely that these investment dollars are going to come back to Singapore.
To relax Singapore Cooling Measures
He further pointed out May’s decline in manufacturing activity for Singapore, and that ensuring the property sector was strong was a crucial as this sector is a critical pillar in the economy. He has said that he feels now is the time for the Government to review the cooling measures that were introduced and that the overall picture suggests these should be made accordingly.
Mr. Kwek’s response has come on the one year anniversary of TDSR’s (Total Debt Servicing Ratio) loan framework being implemented. The framework was put in place to stop borrowers from accruing too much debt.
This measure, along with ABSD (Additional Buyer’s Stamp Duty), has battered the demand in the market. We saw a plunge of 52% for new home sales during the first five months of 2014. According to new estimates from URA, this is a drop to 3,984 units from this time last year.
ABSD reducing Speculative Buying
Many of the industry’s top players agree with Mr. Kwek, further pointing out that whether the ABSD is eased or not, they doubt that speculative buying would be encouraged.
In February of this year, Mr. Kwek has suggested that the Government should at least think about removing the heavy duty of 15% that was being placed on foreign investors buying homes, especially now that there is evidence of the global economy and the property market slowing down. Since then prices have fallen which further confirmed his concerns.
Mr. Kwek did point out that there was no real blanket solution since different areas have been affected in different degrees. He has stated that he is confident that the Government will now take the right measures in coping with the challenges that Singapore is now faced with.