Complete Property Market Updates of Singapore

February 28, 2008

Markets will recover after 3-6 mths of mild recession: S&P analyst

Filed under: Financing, Market Watch, USA — Propertymarketupdates @ 3:30 pm

He warns of one more major market collapse between now and rosier H2

THE sub-prime crisis will cause a mild US recession, but financial markets will recover in three to six months after most of the bad news is flushed out or priced in, says a leading US analyst.

Stephen Biggar, New York-based director for US equity research at S&P Equity Research, was one of the first to predict the sub-prime crisis and subsequent market meltdown that began in late July last year.

He sees many similarities between the current sub-prime fallout and the 1990-91 Savings and Loan (S&L) crisis.

‘The ingredients are the same: banks in trouble, credit crunch, junk bonds, worthless debt,’ he said. ‘But as is the case now, the Federal Reserve stepped in aggressively. The US went into a mild recession, but it was a three- to five-month event for the market.’

Mr Biggar reckons this US recession started in December 2007, but noted that the Fed has moved fast, cutting its key interest rate three times in as many months - the most aggressive cuts in 25 years.

The latest 50 basis points cut last week brought the key discount rate down to 3 per cent.

‘The Fed has been on the curve, if not ahead of it,’ Mr Biggar said. ‘Meanwhile, the impact of Washington’s US$145 billion fiscal stimulus package should kick in by May. And we should also see US corporate earnings improving during the second half, especially for exports.’

He says with half of the total earnings of S&P 500 companies coming from offshore, the weak US dollar environment will be a boost for them.

But while painting a sanguine picture for the second half of this year, Mr Biggar warns of one more major market collapse between now and then.

‘We haven’t seen a capitulation selling yet which will totally flush out the system and set it on course for the next recovery,’ he said. ‘But this will happen in the next couple of months as banks will demonstrate their ultimate exposure (to the sub-prime collateralised debt obligations).’

This will pull the S&P500 down to retest 1,310, he said. If this does not hold, the index will hit a trough at 1,170 points. And that will be the buy signal for value investors.

‘The shock value of bailouts will rattle many, but markets have a way of getting immune to this kind of news,’ he said. ‘Ultimately, the market will price in the risks.’

Mr Biggar is not a proponent of the theory that Asian markets and economies have decoupled from the US.

‘We have already seen how the US market’s pull-back has caused the collapse across this region,’ he said. ‘And the sub-prime losses are not just losses in the US. The exposure is global.’

Mr Biggar told BT in June last year that several US lenders were on the verge of declaring huge sub-prime losses, and that these would trigger a meltdown on Wall Street and elsewhere.

‘All it would take is a failure of one large US bank,’ Mr Biggar said then. ‘In the US sub-prime segment, which accounts for 20 per cent of total lending, delinquencies and foreclosures have been building up. But the troubles have been largely hidden away.’

Those words proved prescient. Just a month later, Countrywide Financial Corp - America’s largest mortgage lender - reported a sharp rise in delinquencies. This was followed by American Home Mortgage’s loan delinquencies, after which two of Bear Stearns’ hedge funds hit the sub-prime skids.

Fast-forward, and Mr Biggar has this prediction:

‘If the parallels to the 1990-91 S&L crisis and what we have now are anything to go by, we should pull out of this in about three to four months.’

Many here would recall that after the recovery from the 1991 crisis, Asian markets headed into their biggest ’super-bull’ run ever in 1993.

And many must also be praying Mr Biggar is spot on - again.

Source : Business Times - 5 Feb 2008

Prices unlikely to fall yet even if launches have been stalled

Filed under: Developer News, Market Watch — Propertymarketupdates @ 12:11 pm

Larger developers can still hold out, but some may be more open to slightly lower offers.

SENTIMENT in the property market is lacklustre, showflats are quiet and developers are delaying launches. So there is a chance that prices will head down, right?

Wrong. While stock market volatility and fears of a United States recession have sent many property buyers to the sidelines, developers have not lost their nerve yet.

Prices for post-Chinese New Year launches are unlikely to head south over the next three months, consultants said.

‘Major developers are financially strong, so buyers can’t expect price cuts at launches,’ said Knight Frank director of research and consultancy Nicholas Mak.

Even if the stock market suffers, the property market tends to lag behind by two to three quarters. Usually, property prices fall only when there’s a recession or general weakness in the labour market, said Mr Mak. Singapore is not facing either of those scenarios and they are not expected to arise, he added.

But individual sellers and some smaller developers could find themselves over a barrel in the months to come if buyers stay home.

Developers certainly have an ample supply of projects for launch, having picked up a slew of sites during the boom times in the past two years.

While many can delay launches, those with 99-year leasehold sites might not be able to hold out for long, said a developer.

Still, even if developers are unwilling to cut prices, they could be more willing to negotiate in today’s more subdued market.

‘Officially, their prices might remain at the levels seen last year, but they could be more open to serious but slightly lower offers,’ said Savills Residential director Ku Swee Yong. However, he does not expect them to budge by more than 5 per cent.

And there are still buyers out there looking for homes. Take the situation at the 618-unit Farrer Court. Owners there will receive their collective sale proceeds early next month and not all would have bought a home yet.

Source : Sunday Times - 3 Feb 2008

February 27, 2008

Time for homebuyers to do their homework

Filed under: Facts & Figures, Market Watch, Regulators — Propertymarketupdates @ 11:55 pm

FIGURES from the Urban Redevelopment Authority (URA) show that private home prices shot up 31.2 per cent last year - way up from 10.2 per cent in 2006 and very close to the spurt seen in the 1996 peak year.

High-end property prices have far exceeded the 1996 peak while mid-tier homes are on a par, noted one market watcher.

Mass market property is a different story. Prices are still below the last peak and good buys could pop up, Mr Ku said.

This segment remains supported by HDB resale flat prices, which rose 17.5 per cent last year, the fastest growth seen since prices shot up by 25 per cent in 1996.

Buyers need to do their homework and look for properties in ‘good’ locations, with easy access to public transport. They could consider fairly new, completed condominiums near an MRT station, said Mr Ku.

They might even look at suburban landed homes, said Mr Ku, who feels those in the Upper Thomson Road to Mandai Road stretch are still undervalued.

As for new mass market launches, the 99-year leasehold Waterfront Waves in Bedok Reservoir has done fairly well. Eighty of the 148 units have been sold. Prices remain at $690 to $870 per sq ft.

‘I think buyers are slowly gaining the upper hand - if they do not already have it,’ said Chesterton International’s head of research and consultancy, Mr Colin Tan. ‘For every buyer, there are many sellers right now. But their expectations are different, there is still a wide gap in between and no sales are taking place.’

Nevertheless, if the stand-off lasts longer than expected, some developers and sellers could panic and slash prices so as to draw in buyers, said market watchers.

These are likely to be the very small developers or new entrants facing a credit crunch, they said.

‘Singapore’s property market is still bullish. The external factors affecting it are actually good because they have stopped the market from overheating,’ said a seasoned property investor.

‘Developers were selling at tomorrow’s prices. Now, they might have to ask for today’s prices.’

Source : Sunday Times - 3 Feb 2008

Rental market watchers home in on key figures

Filed under: Construction News, Market Watch, Regulators, Rental News — Propertymarketupdates @ 11:50 pm

Launch delays, construction bottlenecks may lead to lower home completions than thought.

With private residential rents shooting up 41 per cent last year, one big question is on the minds of property market watchers.

They are now busy trying to figure out just how many private homes will be completed in the next few years - as that will be a key factor affecting how private residential rents will move.

For each of 2006 and 2007, some 6,500-plus private homes received their Temporary Occupation Permit (TOP), meaning that the properties were completed and ready for occupation. This is lower than in preceding years as developers were more cautious in the 2003 to 2004 period due to weak demand for private homes then.

‘As a result, developers initiated fewer projects and bought fewer Government Land Sale sites during the period,’ an Urban Redevelopment Authority (URA) spokeswoman said in response to BT’s queries.

Going forward, about 8,300-plus private homes are slated for completion this year, 13,400-plus units next year and around 18,500 units in 2010 - going by URA estimates as at end-Q4 2007, which were based on the latest quarterly update of completion dates declared by developers for their projects.

However, the actual number of private home completions in 2009 and 2010 may be much smaller because of construction capacity bottlenecks and developers delaying new launches, property consultants and analysts suggest.

Jones Lang LaSalle’s head of research (South-east Asia) Chua Yang Liang says: ‘One factor is whether developers decide to delay launching new projects, given current soft market conditions, especially in the high-end segment, where there may be oversupply concerns. If developers delay project launches, chances are they will also delay the start of their construction.’

The second factor is the bottleneck in construction capacity. This, in turn, will push back TOP dates of projects.

Dr Chua suggests a closer look at URA’s latest numbers as at end-2007, which split the estimates for the number of private homes completed into two groups - based on whether they are in projects which are already under construction or in planned projects.

The 13,493 units slated for completion in 2009, for instance, comprise 11,026 units already under construction as at end-2007 and 2,467 planned units. Dr Chua argues it is almost a certainty that the 11,026 units already under construction will be completed in 2009.

For the units that are being built, ‘there’s no turning back barring unforeseen construction delays. As for those under planning, developers may have some free-play to delay their construction or the tight construction sector may lead to a delay in their completion dates. So there’s for certain at least 11,026 units that will be completed in 2009′, he adds.

For 2010, Dr Chua estimates that between 9,000 and 11,000 new private homes will receive TOP, lower than the headline estimate of 18,509 indicated in the latest official stats. ‘Everyone will be monitoring the official completion estimates quite closely, quarter to quarter,’ he says.

Dr Chua expects URA’s overall private residential rental index to increase by 12-15 per cent this year, after surging 41.2 per cent in 2007.

Knight Frank managing director Tan Tiong Cheng expects private home rents to rise by about 20 per cent this year - roughly half the pace for last year, given that many private residential projects are likely to be completed only in late 2008 and 2009.

Lehman Brothers in a research report dated Jan 28 also projects private residential rents will by rise by 20 per cent this year and stay flat in 2009.

Citigroup in a Jan 25 report noted that the 8,364-unit TOP forecast for 2008 contained in URA’s latest data as at end-Q4 2007 was 51 per cent higher than the 5,541 units forecast for completion in 2008 in URA’s end-Q3 2007 data.

‘With actual demolitions of en bloc developments still impending in the next 9-12 months, net supply will remain low. Construction capacity bottlenecks with competing infrastructure projects may cause completions to be lower than expected,’ Citi Investment Research said.

The net stock of private homes increased by just 1,448 units last year - the smallest rise in at least 12 years.

Property consultants say that this was caused by a combination of a relatively low number of homes that received TOP in 2007 as well as demolition of properties that have been sold by en bloc sales in the past two years.

Source : Business Times - 2 Feb 2008

January 9, 2008

Several MRT station ‘hot spots’ likely in the future

Filed under: Construction News, Investment Tips, Market Watch — Propertymarketupdates @ 2:21 am

Interest in these areas rises as Govt readies review of land use masterplan

A MAJOR review of the town plan governing the development of land across Singapore is due this year - and keen interest centres on the use of land near MRT stations.

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Property analysts have identified several MRT station ‘hot spots’, but they are playing down the possibility that the Government may allow more intensive development in these areas for now.

The five-yearly review of Singapore’s Master Plan, due around the middle of this year, will examine plot ratios - the level of intensity of development on a given site.

MRT stations hold interest for planners and industry watchers for the obvious reason that vast numbers of people use them every day. A new Jones Lang LaSalle report on higher plot ratios near Circle Line stations picked Paya Lebar, Buona Vista, Telok Blangah and Harbourfront as new hot spots.

The Master Plan shows the permissible land use and density for every parcel of land in Singapore. Property analysts say over time, plot ratios will have to increase in selected areas to cater to a growing population. What is uncertain is the timing.

For the purpose of planning land use and transportation in the next 40 to 50 years, the Government is using a projected population of 6.5 million, as opposed to the current population of 4.5 million.

Maximising the use of land around MRT stations is an obvious choice.

‘You can then minimise car usage, and the masses get the best accessibility,’ said Dr Chua Yang Liang, the head of research for South-east Asia at Jones Lang LaSalle. ‘From the planning perspective, it is about maximising your investment dollars and social benefits.’

‘Yes, the plot ratios may rise, but people should not count too much on that,’ said Knight Frank director of research and consultancy Nicholas Mak. ‘I don’t think the Government will be creating a lot of windfalls for private property owners, as there is no compelling reason to do so.’

Besides, some of the areas along the Circle line are fairly built-up, he said.

National Development Minister Mah Bow Tan said in June there was no need for an across-the-board change in plot ratios, as the land available today would be sufficient to meet needs over the next 10 to 15 years.

That, however, has not deterred some property owners from dreaming of a windfall.

Some recalled that certain sites above or near key MRT stations had their plot ratios raised after plans for the North-

East Line (NEL) were finalised more than 10 years ago. A prime example was the land around the Dhoby Ghaut MRT station, when it was also made the NEL interchange.

There is no need for significant increases in plot ratios along the Circle Line in the upcoming Master Plan because the line will not be ready until 2012, said Mr Ku Swee Yong, the director of marketing and business development at Savills Singapore.

Generally, the areas likely to see a significant revision in development density will be vacant state land around the Circle Line stations. Paya Lebar certainly has some. It is slated to be a regional commercial centre, so it is possible that the Government will allow a higher land density around the station, said Mr Ku.

It may happen at the Buona Vista stations, he said, as the area is a biotech hub.

Places such as Bishan and Dhoby Ghaut have been ruled out because there is little empty state land there. Also, plot ratios in Dhoby Ghaut are already very high, said Dr Chua.

‘So you can’t raise them further. Otherwise, you will upset the urban streetscape.’

Source : Straits Times - 7 Jan 2008

Are condo-like HDB flats good value?

Filed under: Developer News, HBD Reviews, Market Watch — Propertymarketupdates @ 2:02 am

They might come with fancy trappings but can’t be bought and sold freely like private condos

THE high-end HDB flats launched yesterday at Boon Keng are the talk of the town.

Styled to look like private condominiums, the flats in City View @ Boon Keng will boast timber flooring and large bay windows, as well as built-in wardrobes and kitchen cabinets.

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PUBLIC HOUSING WILL ALSO OFFER LUXURY LIVING when City View @ Boon Keng is completed in 2011 by private developer Hoi Hup Sunway. Some units will even have wall-to-wall balconies and master bedrooms with a river view. BH FILE PHOTO

These more luxurious HDB flats, built under the Design, Build and Sell Scheme, are being snapped up by homebuyers. Even before the project’s launch, more than 1,000 inquiries had been made. But these trappings come at a price: The 714 flats in the project will be offered for an average price of $520 per sq ft (psf).While this makes them significantly cheaper than actual condos in the area, the prices are a cut above those for regular HDB flats. City View’s three-room flats will go for between $349,000 and $394,000 - about double what similar flats in the vicinity cost.st_080106_are-condo-like-hdb-flats-good-value2.jpg
THE FIRST PROJECT under the Design, Build and Sell Scheme, The Premiere @ Tampines, drew huge crowds at its 2006 launch. PHOTO: SIM LIAN LANDThe five-room flats will range from $536,000 to $727,000, which also makes them far pricier than nearby flats. The average price of a five-room flat in Boon Keng is about $450,000, said Mr Nicholas Mak, the director of research and consultancy at Knight Frank.As a result, even as would-be buyers form long queues for City View, property experts are divided as to whether the project is really worth its heftier price tag.

The main point of contention is what City View, and projects like it, should be compared to as a baseline: HDB flats, executive condos or private condos.

City View is only the second public housing project to be built by a private developer - in this case, Hoi Hup Sunway. The first, The Premiere @ Tampines, is being built by Sim Lian Land.

Property agents believe City View should be compared to condos. They highlight the premium finishings and central location, and the fact that the flats are much cheaper than condos in the area. ‘The furnishings, design and layout are comparable to those of private properties,’ said Mr Mohamed Ismail, the chief executive of property agency PropNex.

‘I think the price is worth it, especially if you’re talking about a three- or four-room flat for $300,000-plus in such a location.’

He noted that a three-room flat in the Rochor area that is over 30 years old can command $80,000 to $100,000 over valuation.

He added: ‘In eight years, City View will still be half the cost of private property and I’m very sure it will be able to find buyers. It will be a golden investment then.’

HSR Property Group, which is marketing City View, pointed to the strong demand for the project even before its launch.

‘The resale value will be there because consumers will pay for the convenience and rarity,’ said Ms Kellie Liew, a project director at HSR. ‘When you look at private condos, you can’t get this price.’

In contrast, property consultants said City View flats were more readily comparable to other types of HDB flats than to condos. They lack the security and amenities provided in condos and cannot be resold to foreigners, said Mr Ku Swee Yong, the director of marketing and business development at Savills Singapore.

‘The project is more expensive than HDB, but you still have HDB rules and HDB guidelines for ownership,’ said one consultant who asked not to be named. ‘The better location doesn’t justify the higher price tag - it’s supposed to be public housing!’ City View flats are sold under the same rules that apply to new HDB flats. Buyers qualify only if they fall under an approved family nucleus scheme, among other things.

Mr Mak noted that the flats cannot be resold for the first five years. ‘This sort of thing tends to be a consumer item - you buy, you use, and if you make money from it, you’re lucky,’ he said.

‘If you buy direct from HDB at a subsidised rate, it’s a better investment as there’s more room for capital appreciation. But if you buy the flat at a high price to begin with, the upside is limited.’

Even owners of executive condos - which have condo facilities and can be resold to foreigners after 10 years - are finding it difficult to make a profit on their homes, added Mr Mak.

Source : Sunday Times - 6 Jan 2008

Economists unfazed by weaker quarterly growth

Filed under: Market Watch, Singapore Economy — Propertymarketupdates @ 1:36 am

Only 1 in 6 polled revises first-quarter estimates despite latest data being weaker than expected

ANALYSTS are upbeat about the economy’s outlook in the current first quarter despite some weaker-than-expected economic figures yesterday.

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In fact, out of six analysts polled by The Straits Times, only one was revising her first-quarter estimate.

The rest are sticking to their guns despite the lower-than-forecast advance estimates for Singapore’s fourth-quarter growth.

Many said a key factor behind the weaker results last quarter was a cyclical slowdown in the pharmaceutical sector, which meant lower manufacturing contributions to economic growth.

This was more a reflection of the industry’s volatility and less a sign of weakening demand. Also, continued strong performances from other sectors, such as services and construction, will buoy the economy, they said.

The Ministry of Trade and Industry yesterday released economic growth estimates for the fourth quarter of 6 per cent on a year-on-year basis, after a 9 per cent gain in the third quarter.

On a quarter-on-quarter seasonally adjusted annualised basis, economic output actually fell by 3.2 per cent compared with a 4.4 per cent gain a quarter earlier.

This translates to a 7.5 per cent economic growth for the full year, which falls at the bottom end of the official government forecast range of 7.5 per cent to 8 per cent full-year growth.

Advance estimates are computed largely from data from the first two months of the quarter and are subject to revision when more comprehensive data becomes available.

Of the six analysts polled, only Ms Selena Ling, an economist with OCBC, lowered her first-quarter forecast to 5.8 per cent from 6.2 per cent after reviewing the advance fourth-

quarter estimates. She also lowered her full-year 2008 estimates by half a percentage point to 6 per cent.

A key financial indicator of how the first quarter will perform is if the notoriously volatile pharmaceutical sector remains suppressed this year or bounces back rapidly, she said.

However, United Overseas Bank economist Ho Woei Chen believes there is no need to panic.

Although surprised at the weaker numbers, she said: ‘It’s down to the routine shutdown of plants in the pharmaceutical industry, which is part of the production process.

‘The sector tends to be inelastic to global business cycles, and I expect the biomedical industry to do well in the first half of this year and offset any potential slowdown in the electronics sector.’

She maintained her first-quarter estimate of 5.5 per cent and expected full-year gross domestic product to grow by 6.3 per cent.

The construction sector is expected to benefit from work on two integrated resorts and the Marina Bay Financial Centre, which are moving into the higher-value stages of development, Ms Ho added.

‘Services and tourism will also receive a boost when attractions and events, such as the Formula 1 race, come to town,’ she said.

When asked if fears of a technical recession - when the economy contracts for two quarters in a row - are well-founded, Action Economics economist David Cohen said it was not an impossibility.

‘We have to wait and see how things play out in the rest of the world. But the unemployment rate is at its lowest in almost a dozen years, so any contraction would literally be ‘technical’ because it is obviously not a downturn here in Singapore.’

He also said he expected the latest numbers to encourage the Monetary Authority of Singapore (MAS) to exercise patience when it came to adopting an aggressive monetary policy to handle burgeoning inflation.

A stronger Singapore dollar will help reduce prices of imported goods, but will also make exports more costly and less competitive. Singapore’s latest November consumer price index surged 4.2 per cent - a 25-year high.

Mr Cohen said: ‘The moderating growth is likely to encourage the central bank to exercise patience when it comes to steepening currency appreciation to handle inflation.

‘Any pickup in inflation this year could also be attributed to the hike in the goods and services tax, which cannot be dealt with through monetary policy anyway.’

Ms Ling agreed, saying: ‘The moderating growth should dampen speculation that the MAS will shift to a more aggressive monetary policy before its policy review in April.’

Source : Straits Times - 3 Jan 2008

Singapore private home prices up 31% in 2007

Filed under: Market Watch, Singapore Economy — Propertymarketupdates @ 12:41 am

Resale prices of HDB flats also rise by 17.4% for the year, in tandem with robust economy

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Strong economic performance and efforts to woo the cash of wealthy foreigners also helped to perk up the sector. — PHOTO: PRESIDENT’S DESIGN AWARD

PRICES of Singapore’s private homes rose by 31 per cent in 2007, while that for Housing Board resale flats went up by 17.4 per cent, as the property market rebounded after years of sluggish growth.But for the fourth quarter, prices of private residential property went up at a slower pace of 6.6 per cent compared with 8.3 per cent in the previous quarter, according to flash estimates of the price index for private residential property released by the Urban Redevelopment Authority (URA) on Wednesday.Separate flash estimate released by Housing Board also on Wednesday showed that resale prices of HDB flats went up by 17.4 per cent for the year, in tandem with improved sentiments and economic growth.The fourth quarter HDB’s Resale Price Index rose to 121.6 points, an increase of 5.6 per cent over the previous three months.The URA, which oversees land use planning, said the fourth quarter figures were based on preliminary data.The flash estimates showed that the increase in prices of non-landed private residential properties was higher in the suburban regions than the central prime areas.They went up by seven per cent in the Core Central Region, 7.3 per cent in the Rest of Central Region and 7.5 per cent in Outside Central Region in the last quarter.In comparison with the third quarter, prices of non-landed private residential properties rose by 8.3 per cent in the core central region, and 7.9 per cent respectively in the other two regions.The flash estimates are compiled based on transaction prices given in caveats lodged during the first 10 weeks of the quarter, supplemented by information on the number of new units sold.

The statistics will be updated four weeks later when URA releases the full fourth quarter 2007 real estate statistics, when more data on the caveats lodged and the take-up of new projects are captured.

On the supply side, the URA said there are about 65,400 private residential units in the pipeline, of which about 41,600 new private housing units are expected to be completed between 2008 and 2010.

About 38,000 units of the supply in the pipeline (or 58 per cent) have not been sold by developers yet. This does not take into account new sites that will be made available for development through the Government Land Sales (GLS) programme.

The HDB is also increasing the supply of new flats under the Build-to-order system and the release of Design, Build and Sell Scheme (DBSS).

Both the URA and HDB said they will continue to monitor the market situation and property prices closely.

Singapore’s property sector saw record prices paid by developers for older condominium sites as they rushed to redevelop them into new units to meet robust demand during the year.

Data showed prices are within sight of peaks reached in 1996, before a regional financial crisis struck and sent the sector into the doldrums.

Singapore’s property sector finally began to turn around after the government in 2005 gave approval for two multi-billion-dollar casino-entertainment complexes.

Strong economic performance and efforts to woo the cash of wealthy foreigners also helped to perk up the sector.

Source : Straits Times - 2 Jan 2008

Singapore’s private home prices rose 6.6% in Q4

Filed under: Market Watch, Singapore Economy — Propertymarketupdates @ 12:23 am

Singapore private home prices rose at a slower quarterly pace of 6.6 per cent in the last three months of 2007, according to government figures released on Wednesday.

The Urban Redevelopment Authority’s price index for private residential property rose 6.6 per cent in the final three months of 2007, slowing from the 8.3 per cent rise in July-September.

In the whole of 2007, private home prices rose 31 per cent.

The Singapore government said in October that developers could no longer sell uncompleted property on a deferred payment scheme in a bid to reduce speculation in the real estate market.

Other recent measures taken by authorities include raising development charges to make it more expensive for companies such as CapitaLand and City Developments to buy out existing condominiums for redevelopment into larger apartment blocks with more units.

A separate index compiled by the Housing Development Board showed resale prices of government-built HDB apartments rose 5.6 per cent in the fourth quarter, slower than the 6.6 per cent quarterly gain in July-September. — REUTERS

Source : Business Times - 2 Jan 2008

A year of mixed results for property firms

Filed under: Developer News, Market Watch, Regulators — Propertymarketupdates @ 12:18 am

IT WAS a year in which property prices soared and the earnings of property companies surged with them.

But the government’s move on Oct 26 to discourage speculative buying by withdrawing the deferred payment scheme for private property purchases led to a steep fall in the share prices of Singapore developers in November and December, wiping out most of their gains earlier in 2007.

Most have not recovered, which means any gains in their market value over the year were lacklustre compared with advances of more than 80 per cent for the largest Singapore developers in 2006.

Among the bigger developers, GuocoLand saw its market value grow the fastest in 2007 - both in dollar and percentage terms.

Its market capitalisation rose from $1.72 billion at the end of 2006 to $5.01 billion at the end of trading yesterday - an increase of almost three times.

By contrast, CapitaLand, the largest developer here, ended the year with a market cap of $17.6 billion, just 2.1 per cent higher than at the end of 2006.

City Developments, the second-largest developer here, saw its market cap rise 11.8 per cent during the year to $12.9 billion.

Keppel Land’s market cap rose just 5.6 per cent to $5.24 billion, while UOL Group’s market cap rose 4.3 per cent to $3.6 billion. Singapore Land saw its market cap shrink 7 per cent to $3.3 billion.

Some of the smaller developers did turn in big gains. SC Global Developments, for example, saw its market cap rise from $372 million to $956 million during the year.

Overseas developers listed here also saw larger gains. Hongkong Land, a commercial developer in Hong Kong, saw its market cap grow 17.2 per cent to $16.4 billion.

And Yanlord Land, a mainland Chinese developer listed here, saw its market cap rise 47.1 per cent to $6.01 billion.

Source : Business Times - 1 Jan 2008

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