Thursday, July 24, 2014

Singapore home prices set to extend declines, Keppel Land says

Home prices in Singapore will probably extend declines as the government sticks with curbs, according to Keppel Land, signaling further losses for Asia’s second-most expensive housing market.

“Home prices are expected to continue to moderate,” Chief Executive Officer Ang Wee Gee said at a results briefing yesterday. “Singapore is unlikely to relax property-cooling measures in the short term.”

Residential values in the city-state slid for a third quarter in the three months to June to post the longest losing streak in five years after the government introduced loan measures last June, widening a campaign that began in 2009 to curb speculation. Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said on July 4 that a further correction in the Singapore property market would not be unexpected. Keppel Land stock closed yesterday at the highest in almost two months.

“I don’t see the government relaxing the curbs for a year,” said Nicholas Mak, an executive director at SLP International Property Consultants in Singapore. “Developers that have deep pockets may not be under tremendous pressure to cut prices.”

Singapore’s home sales by volume fell 68% in June from May as developers marketed fewer projects. The government began introducing the housing-market curbs in 2009, with some of the strictest measures implemented in 2013, including a cap on debt at 60% of a borrower’s income, higher stamp duties on home purchases and an increase in real-estate taxes.

CHALLENGING PERIOD

“We don’t see a major correction in the residential property market in Singapore,” said Ang after the company reported second-quarter profit rose 12% to $107.2 million. The first six months have been challenging as the enforcement of cooling measures in Singapore and in China continued to damp the market, said Ang.

Keppel Land’s revenue declined 7.8% to $304.6 million in the three months to June, according to a statement. The developer sold 98 homes in Singapore in the first six months of the year.

An index tracking private-residential prices retreated 1.1% to 209.3 points in the three months to June, following a 1.3% decline in the previous three months, according to preliminary data released by the Urban Redevelopment Authority on July 1.

Keppel Land shares gained 5.1% this year compared with the 8% advance in the Straits Times Real Estate Index. The stock ended at $3.51 yesterday, the highest close since May 26.

No comments:

Post a Comment