Private home prices and sales volume will likely drop

CEO of CapitaLand, Liew Mun Leong said that private home prices and sales volume is about to drop as the effect of latest government’s set of measures to cool down the real estate market.

However, Mr. Liew said he is “not too unhappy” with the property measures as they will make it easier for the company to win land parcels in government tenders.

Describing the measures as “incremental”, Mr. Liew said some property developers are driving up land prices by bidding aggressively.

“We are amazed at the prices that come out (in government land tenders),” he said. “Not that we are jealous but when we look at the numbers, we know that we can’t do it. So in a way, we agree that there is some speculative chasing for land.”

CapitaLand will proceed with its plans to launch 1,700 mainly upmarket homes this year. The units will come from five developments – Urban Resort Condominium, The Nassim, d’Leedon, The Interlace and the residential component of a new project at Bedok Town Centre.

Mr. Liew said on Friday that prices will drop following the new measures, but he is still optimistic about the luxury and high-end market, which attracts cash-rich investors. This is contrary to the group’s statement last week, when it said private home prices will likely climb by five to 10 percent this year, following a 17.6 percent increase last year.

Going forward, Mr. Liew said the measures will separate serious property developers from speculators: “These types of measures will differentiate the real estate developers who helped with Singapore’s urbanisation from the speculators, who build shoebox apartments,” he said.

However, he hopes that the government will be quick to fine-tune its policies in a down-market when demand fizzles out.

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