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Simon Cheong, the newly elected president of Real Estate Developers Association of Singapore, yesterday painted a buoyant outlook for all sectors of the local property market.

‘We now have all the cylinders firing away at the same time. We’re going through a major structural change. The integrated resorts will be a big boost for tourism,’ he said.

‘And we’re seeing a lot of momentum in terms of financial institutions expanding in Singapore. Environmentally, we’re probably one of the cleanest cities in the world - a great place to live, work and play.’

Providing another boost to the market is the latest cut in corporate income tax, he said, adding that ‘we’ll be able to attract a lot of investments here’.

‘This augurs very well for all sectors - offices, tourism, housing accommodation,’ Mr Cheong told reporters on the sidelines of Redas’s Chinese New Year celebrations yesterday.

He does not think that the redevelopment of collective sale sites - which over the past two years have been predominantly in the prime locations, including the Orchard Road area - will create an oversupply of high-end homes.

‘I don’t foresee a big oversupply situation at the moment because in the next 12 months, you’ll see a lot of en bloc buildings coming down physically.

‘And that’s a very powerful message. It takes three months to bring a building down, but it takes three years to put it back up . . . The only thing that is going to happen is that (high-end residential) prices are going to go up.’

Mr Cheong, who is also chairman and CEO of listed SC Global Developments, pointed out too that the Singapore economy will be different by the time the new projects are completed on these collective sales sites.

At most, the luxury housing market could take a breather - although Mr Cheong does not see this happening in the next three years - before moving up again.

Assuming Singapore’s population grows from the current 4.5 million to 6.5 million in the next 10-15 years, there will be a shortage of homes, Redas officials claimed.

Mr Cheong argued that ‘it’s also logical’ to expect the price recovery to filter down to the lower tiers of the residential property market this year, including the mass market.

This will occur as those who are priced out of the high-end market go to the outskirts.

Also, those who have sold their homes in prime districts through en bloc sales and who don’t find their sales proceeds enough to buy replacement homes in the same areas may choose to buy their next property in a secondary location.

Mr Cheong said that property speculation - which he estimated at ‘no more than 10 per cent’ of home buyers in the high end market - is not a big cause of concern.

He also said that there’s ‘adequate margin to absorb an increase in sand cost’ as sand cost makes up about 1-2 per cent of total construction cost. He was alluding to the Indonesian ban on sand export to Singapore.

The new Redas president also paid tribute to his predecessor - Pontiac Land chairman Kwee Liong Keng. Mr Kwee has just completed his second two-year term and over the years, served five terms in all in the top post at the developers’ body.

‘He is not only a man of many talents, his affable nature has won him high regards and love of many, both as a friend and as a business associate. His gracious manner and humility have won the hearts of those who work with him,’ Mr Cheong said in a toast to Mr Kwee.

Source : Business Times - 27 Feb 2007