Source : The Straits Times, Dec 5, 2007
PROPERTY developers are so rushed off their feet that they say the idea of the United States sub-prime crisis taking some froth out of the exuberant market can only be good.
CapitaLand's chief executive, Mr Liew Mun Leong, said in Ho Chi Minh City yesterday that market confidence has been affected a little by the sub-prime issue but a slowdown may not be bad.
'If the economy moderates, the property market will moderate... It is not necessarily a bad thing,' he said.
'Sometimes you need a little bit of slowdown,' he added. This is so that businesses can be sustained.
Mr Liew also said that developers will probably not pay bumper high prices for collective sale sites and that supply volume may slip.
However, prices have been holding and he does not see them falling next year.
A similar note was struck by Mr Simon Cheong, the president of the Real Estate Developers' Association (Redas).
He told the Association's 48th anniversary dinner last night that the build-up of new projects has left the industry a little breathless.
'We are now the victims of our own success. Our biggest worry is now rising costs, shortage of construction materials and inadequate skilled labour,' said Mr Cheong at the Ritz-Carlton Millenia Singapore hotel.
He added that developers share the Government's concerns about rising exuberance in the market and backed its efforts to apply a touch of the brakes.
Mr Cheong was also quick to add that it has taken almost 10 years for the property market to turn around.
'Redas is of the view that it is difficult to micro-manage, especially in a global context where the flow of funds into Singapore property is driven by a bigger picture than just short-term opportunistic buy-ins,' he said.
Singapore is no different from other major gateway cities, where prime real estate commands premium rents, he added.
Trade and Industry Minister Lim Hng Kiang, who was the guest-of-honour, said rising costs are a challenge that accompanies the growth in all parts of the property market.
The Government, he reiterated, is ensuring there will be a sufficient supply of office, residential and hotel space.
Mr Cheong also said that Redas has created a foreign investment committee, to be chaired by Hongkong Land director Robert Garman, to encourage foreign companies to come to Singapore and stay invested.
He warned that developers should take stock of the storm brewing globally as they respond to local opportunities.
'Rising oil prices, a weakening US dollar, the sub-prime crisis and occasional shocks in the supply of construction materials cannot be taken too lightly.'
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