SINGAPORE — The partial easing of the property cooling measures announced by the Government last Friday is a “small step” in the right direction, said CapitaLand Singapore CEO Wen Khai Meng yesterday, as he urged the authorities to relax rules which penalise developers over unsold units in order to ensure a “soft landing” for the market.

Noting that the transaction volume has slowed in the last two years — despite recent signs of pick-up — Mr Wen said: “The Government should give developers a longer time to sell the units because I don’t think it is in the interest of the Government to see any abrupt changes or instability in the market.”

Reiterating that the impact of the moves will be “muted”, Mr Wen nevertheless said that they demonstrate “the Government’s readiness to calibrate and fine-tune measures” based on market conditions.

“We are happy that the Government is willing to tweak the measures according to what is happening in the market,” said Mr Wen, who was speaking at the pre-launch media briefing of CapitaLand project Marine Blue.

Despite receiving its temporary occupation permit (TOP) in October last year, the 124-unit project in Marine Parade will only be launched for sale this Saturday.

Mr Wen told reporters that the timing was pre-planned and had nothing to do with the Government’s announcement.

“We wanted the project to be completed first because we think that a completed product will give a better representation to the buyers on its attractiveness.

“Because if we had a show unit that is offsite, it is very hard (for prospective buyers) to imagine — it would just be pieces of papers and models,” he said. CapitaLand had released 50 units for sale during a preview in January 2015. Of these, 38 were sold.

The units are priced between S$1.13 million and S$5.24 million each.

Analysts noted that CapitaLand’s decision to launch Marine Blue after attaining TOP reflects the state of the market.

Adding that the practice is quite common in today’s tepid market, Mr Donald Han, managing director of property consultancy Chestertons, said: “Developers are looking at the latest announcement as an opportunity to formally launch their projects.”

Mr Colin Tan, director of research and consultancy at Suntec Real Estate Consultants, said that under normal conditions, “most developments will have their official launch not long after getting their sales licence, as any collection of upfront monies will help offset the financing cost for the project”.

He added: “(But) if sales are bad or not as good as expected, the project risks being labelled an unpopular project and this stigma may hurt future sales or the developer’s ability to raise prices.”

Under the Residential Property Act’s Qualifying Certificate (QC) rules, all developers with non-Singaporean shareholders or directors are required to obtain the TOP for their housing developments within five years and to sell all dwelling units within two years from the date of TOP.

In addition, developers could be subjected to Additional Buyer’s Stamp Duty (ABSD), which was first introduced in 2011 and revised upwards in 2013.

ABSD is a tax levied on both individual property buyers and developers. Developers are required to pay an ABSD of 10 or 15 per cent, including interest, on the land cost of a project, unless they build and sell all units within five years of being awarded the site.

Marine Blue is affected by the QC rules, and CapitaLand will have to sell all the units by October 2018 to avoid penalties. While Mr Wen was confident that the bulk of the units will be sold by the deadline, he suggested that the Government extend the timeframes for the QC rules and the ABSD by two years each.

On whether he expects the Government to further ease the cooling measures, Mr Wen said it is “very hard to read” the authorities’ next moves.

“The Government is taking a very cautious approach. You notice that even this recent step is a very small incremental step,” he said. Angela Teng

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