Don't Ban En-Bloc Sales Of Newer Buildings, Let Market Forces Prevail

Source : The Straits Times, Forum, Sep 19, 2007

I REFER to the letter, 'Newer buildings: Ban en-bloc sales' (ST, Sept 16), by Mr John Lee Junshi.

I believe the property crunch could worsen and the price of private condos further escalate if we start fiddling with the system like prohibiting the collective sale of buildings less than 20 years old.

It would jack up unrealistically the development charge, et cetera. A successful collective sale, after all, is a matter of supply and demand between willing sellers and willing buyers.

It is obvious that with the booming economy, there are now more affluent Singaporeans aspiring for the condo lifestyle. Foreigners and expatriates alike are also buying into real estate as an expression of their confidence in Singapore's future. We should not deny them this.

En-bloc sales result in economic activities for Singapore in the construction and spin-off industries. It is also an opportune time to enable the more able Singaporeans to move into private housing or others to move out of subsidised HDB housing, thus lightening the load of the Government.

At 700 sq km, land in our city state is indeed a scarce commodity. Any measure, therefore, to contain the pent-up pressure could ultimately explode into even higher condo property prices, if not now, soon. Do we then not want to let market forces prevail?

With a possible population of 6.5 million in the future, we ought not to excessively and artificially curb market forces which are at work now since a collective sale would only materialise into a bigger-capacity building, say, three years later.

As the opportunity cost of releasing more and more land now for property development can only be at the expense of our future generation, we should take a closer look at how we can maximise our current supply side.

Are there plot ratios that are out of sync with the present time? Are there still substantial uneconomical six-storey and below buildings around, outside security and conservation areas, that can be renewed to house more on the same sites?

Chan Chun Wah