singapore's property glut is an unintended consequence of government measures to force developers to build and sell apartments quickly or face stiff penalties, according to City Developments.
The city-state's second-biggest home builder has come out swinging against a rule that imposes a levy on companies if they don't complete construction and sell all units within a period of five years from acquiring land.
Chief executive officer Sherman Kwek said the timeline should be lengthened to seven or even 10 years "so that it reduces the immense pressure on developers and prevents the current supply glut from worsening."
"With a longer permissible development and sales period, developers can then stagger their sales launches and ensure a more balanced demand and supply equation," he said.
"Another way is for authorities to allow the additional buyers' stamp duty to be pro-rated, therefore, if the project still has a few remaining units by the time the deadline swings around, at least the penalty is more bearable."
Singapore has almost 32,000 either finished or under-construction apartments in the pipeline. It's a glut market watchers say could take years to clear.
"Assuming conservative sales estimates of around 8,000 to 10,000 units per annum, the supply should be fully absorbed in about three to four years," Kwek explained.
Last month, the central bank warned that the over-supply also threatens to push down prices.
Far East Organisation declined to comment on the property glut.
CapitaLand said it will "adopt a disciplined approach in our bids." "We will monitor market conditions and tailor marketing and sales strategies accordingly," a spokesperson said.
Kwek said that after the most-recent cooling measures in July 2018, the penalty now stands at a "petrifying rate" of 31.25 percent, comprised of a 25 percent penalty compounded at an interest rate of 5 percent per annum for five years.