Thursday, June 23, 2011

Khaw Boon Wan's blog postings rattle developers, but buyers welcome them

NATIONAL Development Minister Khaw Boon Wan's frequent blog postings about the property market are making some developers jittery, with one even branding the comments as 'scary'. Property players say Mr Khaw's online musings - which are coming a...
NATIONAL Development Minister Khaw Boon Wan's frequent blog postings about the property market are making some developers jittery, with one even branding the comments as 'scary'.


Property players say Mr Khaw's online musings - which are coming at a rate of up to four updates a week - blur the line between personal opinion and official policy.


They also fear his comments have already swayed market sentiment and are turning buyers more cautious.


But others in the industry welcome a new line of communication, while home buyers seem to relish the air of candour from the ministry.


One of the minister's most pointed blog entries was written earlier this month, when he fanned fears of more cooling measures by stating that 'sharp property price increases cannot go on forever'.


He also sounded an alert that a hefty 53,000 new homes will be looking for buyers over the next few years.


Mr Khaw used his blog to announce last month that the construction of build-to-order Housing Board (HDB) flats would be ramped up to a record 25,000 units this year, with the pace of building expected to continue next year.


Property agents and developers reported slower sales after Mr Khaw's remarks, while early signs indicate that land bids have turned cautious as developers await clearer moves from the Government.


Mr Jonathan Phua, general manager of business development at developer Tee International, said the minister's blog has cast a shadow over the market.


'I think, from now, most developers will be more prudent in bidding for land, and we can expect to see home prices stabilising,' he said.


A managing director of a boutique developer said the blog was 'scary' and 'too fluid', adding that the postings seemed like an unofficial press release.


He also said the blog, by hinting at more measures, had itself created a cooling effect, possibly reducing the need for additional intervention.


'There needs to be a clear line on whether his blog is just consultative or official,' he said on condition of anonymity. 'It is not fair to developers and stakeholders to try to keep track. I would prefer a more consistent direction coming from the National Development Ministry instead.'


The blog's address - at mndsingapore.wordpress.com - seems to indicate that the entries are being written in Mr Khaw's capacity as minister, rather than merely reflecting his personal views.


Another blog issue that has developers concerned involves the review of HDB's $8,000 monthly income ceiling for buyers of new build-to-order flats.


Mr Khaw's blog has made the ceiling increase sound inevitable, from what was a 'review' previously, developers say.


However, no indication has been given on when this might happen, what the ceiling might be raised to or if the ceiling for design, build and sell scheme (DBSS) flats and executive condos will be affected.


Yet, developers say, they have to figure out a way to price these uncertainties into their land tenders.


Some are also uneasy about the time lag between when Mr Khaw's thoughts are published online and an actual policy shift. Small- to mid-sized companies that lack deep pockets are more concerned.


However, other developers are less perturbed over the blogging minister, saying the advent of social media meant the faster dissemination of information was inevitable.


Roxy-Pacific executive chairman and chief executive Teo Hong Lim said the basis of the Government's policy - to achieve a stable market - has not changed. The blog also provides another line of communication, making Mr Khaw more accessible, he added.


Mr Teo stressed that his company has always adopted mid- to long-term planning strategies to take it beyond any possible short-term measures or changing sentiments caused by Mr Khaw's blog.


'There are ways that we can manage our risks. For example, we can choose to buy freehold land to differentiate ourselves from government land sales sites or buy sites in locations where HDB flats will not be built... Life goes on,' he said.


Most home buyers also welcome the blog, saying its frequent updates and easy access - compared to sporadic official press releases - allow them to be more informed of possible policy shifts.


Marketing manager Leonard Chong, 28, said: '(Mr Khaw's) postings seem to be more candid, which makes him more personable... His frequent updates suggest that he is tracking closely what is happening on the ground.'





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