A caution over property 'signals'

Published September 29, 2010

(SINGAPORE) The cooling measures announced by government on Aug 30 to curb speculation in the property market could send out misleading signals, said a property veteran.

Wheelock Properties (Singapore) CEO David Lawrence yesterday urged the authorities to be careful about sending out a message in which some might equate investing in property with speculation. The public could interpret that as a signal that government wants them to invest in shares and bonds instead, which could be dangerous, he said.

Mr Lawrence made the case for investing in property as being a safe long-term investment and hedge against inflation, as long as one does not overgear. 'Various people in government keep saying: 'Oh we want to stop property speculation.' Now that's wrong. You should not really differentiate between investment in different asset classes. That's up to individuals to make their own decision where they are going to invest.

'If you differentiate against different asset classes, it's quite dangerous. If you're going to say: 'Oh we don't want you speculating in properties,'.'

'Let's say you buy Sing Tel shares today and sell them tomorrow, is that investment? No it's speculation. The same with bonds. If people start thinking the government wants them to buy shares or bonds because it's investment, that's very dangerous.'

'I think this use of the word 'speculation' for property and 'investment' for everything else is not correct,' Mr Lawrence, a Singapore citizen, said in a telephone interview.

'I am 64 years old now. If I look back, (I can tell you) if you invest in property, never mind the crashes, and ups and downs, in the long term you make money, as long as you're not stupid enough to overgear. You invest in property and property will always be there, particularly prime property. I can't tell you how many people I know have lost all their money investing in bonds - and currently there is a bond bubble - and by investing in shares as well.'

Source: http://www.businesstimes.com.sg