Property developers who are worried about the looming uncertainty in the property market are fast-tracking mass market properties to take profits sooner, said Cheng Wai Keung, chairman of Wing Tai Holdings.
As the cooling measures implemented by the government take hold, developers are launching properties at a faster pace than usual, said Mr. Cheng, who spoke to the Straits Times.
In response to a question on whether he believed that a correction in the real estate market would occur, he replied: “My reading of the upgraders’ market is that it seems to have come to a saturation point,” after a “tremendous increase” in the number of permanent residents and low interest rates caused property demand to outstrip supply.
The company would have tendered for land in 2009 before prices increased, but not now as it would be risky to “chase” rapidly increasing prices, said Mr. Cheng.
“If you look at any developer, they are actually pushing out (properties) much faster than the normal timeframe required. What it translates to is that people believe the risks are too high to wait.
“You can see that more and more projects are actually pushed out in six to nine months’ time, rather than the normal time of one to 11/2 years.”
“If we also try to push off in the next six to nine months, we may get jammed and given there is such a high price, we believe, even if we wait, the upside may not be there,” added Mr. Cheng.
The mass market segment has seen increases in property prices, and homebuyers have already bought 9,957 private homes in January to July this year, following the strong sales of 14,688 units in 2009.
Based on the latest official data, private home sales have slowed down but prices have still increased above their 1996 highs.
Mr. Cheng said that more government measures will be rolled out if the property market is still out of control.