Right time to review cooling measures: Kwek Leng Beng

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City Developments' chairman Kwek Leng Beng
The Straits Times

VETERAN property developer Kwek Leng Beng fears Singapore could lose its edge as an investment destination unless the Government reviews its property cooling measures.

Mr Kwek, executive chairman of Hong Leong Group Singapore and City Developments, said foreigners were choosing to plough their investment dollars into countries like Britain, Australia and the US over Singapore, while Singaporeans have been investing abroad.

"We are losing these investments to other countries even though these foreign properties have a higher risk profile," Mr Kwek told The Straits Times yesterday. "It is unlikely these investment dollars will return to Singapore."

He noted the unexpected decline in Singapore's manufacturing activity in May, adding that it is crucial to ensure that the property sector is in good health as it is a crucial pillar of the economy.

"The overall picture seems to suggest that it may be timely now for the Government to take another look at the cooling measures introduced and make adjustments accordingly," he said.

Mr Kwek's comments came as the Total Debt Servicing Ratio (TDSR) loans framework, which aims to deter borrowers from accumulating too much debt, hit its one-year mark on Sunday.

The measure, together with the Additional Buyer's Stamp Duty (ABSD), has hammered demand in the market.

New home sales in the first five months of this year plunged 52 per cent to 3,984 units from the same period a year ago, according to fresh estimates from the Urban Redevelopment Authority.

Industry players echoed Mr Kwek's sentiments, pointing out that even if the ABSD is eased, it is unlikely to encourage more speculative buying.

PropNex chief executive Mohamed Ismail said: "It is not going to impact Singaporean's financial prudence or encourage speculation because they already can't overstretch themselves with the TDSR."

However, there is the possibility of a slight lift in prices if buyers returned in force to the market, Mr Ismail pointed out.

"But buyers are already not picking up units now, so if prices increase, they may even be less inclined to buy," he said.

Century 21 chief executive Ku Swee Yong said neighbouring nations like Indonesia are becoming attractive alternative investment destinations.

He added that policies should be aligned with the Government's aim of attracting foreigners to set up homes here.

Mr Kwek suggested in February that the Government consider lifting the hefty 15 per cent duty levied on foreigners buying homes after the property market and global economy showed signs of slowing. Prices have since fallen, confirming his concerns, he said yesterday.

However, Mr Kwek noted that the different segments have been affected to varying degrees, so there is no blanket solution.

"I have confidence the Government will take appropriate measures to deal with the challenges that Singapore faces," he said.


This article was first published on June 1, 2014.
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