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CapitaLand: Singapore Property Market To Be Hit By Cooling Measures
In the Spotlight | 17 January 2011
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CapitaLand said that sentiment toward the Singapore property market will take a hit due to the latest cooling measures announced by the government, adding that it hopes the authorities will take “calibrated” steps when the market reverses.

“For the overall market, the latest cooling measures are expected to impact on sentiments in the near term and transaction volumes and prices may moderate,” CapitaLand said in a statement.

Last Thursday, the government announced a slew of measures to stabilize the property market which included making individual buyers with outstanding loans on one or more properties pay more in cash, increasing the holding period for imposition of seller’s stamp duty to four years from three years, and limiting loans that non-individual purchasers can take when buying residential properties to 50% of the property value.

Investors dumped shares of property developers following the news. City Developments fell the most, sliding as much as 5% before wrapping up the day 4.6% lower at S$12.16. CapitaLand shares fell 3.4% to close at S$3.71, while Keppel Land dropped 3.1% to end at S$4.73. The Singapore Straits Times Index fell 0.3% to 3245.96 points.

“The government has been consistent over the years in implementing calibrated measures to curb excessive speculation in a buoyant market. We trust that the government will similarly adopt forward-thinking and calibrated measures when the market reverses,” CapitaLand said.

Southeast asia’s largest property developer by market capitalization said that it will proceed with “business as usual” and launch 1,700 homes in Singapore this year.

“We are supportive of the Singapore government’s measures to ensure prices rise at sustainable levels, in line with economic fundamentals,” CapitaLand said.

City Developments said: “As these measures have just been released, the market will take time to absorb the news. We will assess the situation and review our strategy in the meanwhile.”

Analysts said the latest set of measures are the most severe to date and are likely to erode sentiment and dampen demand in the near term.

This is the fourth set of measures taken by the government since late 2009 to cool the property market which has been growing at such a rapid pace that some analysts think a bubble may be forming that is vulnerable to bursting.

Among the measures introduced already was the announcement of an aggressive land supply program for the first half of 2011 to encourage developers to start building more residential property. Also, the government in August cut the loan-to-value ratio to 70% from 80% for individual purchasers with existing home loans.

“Unlike the previous three rounds, the current measures significantly increase frictional and liquidity costs and is likely to slow down investment and upgrade demand, just as supply is starting to rise,” Deutsche Bank said in a note.

CapitaLand  3.580 -- --   
Business: Co develops, owns, and manages real estate properties. [FY18 Geographical] China (41.2%), S'pore (38.5%), Europe & others (18.6%), Vietnam & Others (1.7%).

Insight: Apr-19, 1Q19 revenue fell 23.8% while net profit d... Read More
City Developments  10.330 -0.06 -0.58%   
Business: Co is an international property & hotel conglomerate. [FY18 Turnover] Property development (48.4%), hotel operations (39.8%), rental properties (8.5%), others (3.3%).

Insight: May-19, 1Q19 decreased 29.5% to $746.2m compared t... Read More

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