(Corrects last paragraph of story published on Nov. 26 to say CapitaLand’s partners include a unit of Wells Fargo and a fund managed by a unit of Morgan Stanley.)
CapitaLand Ltd., Singapore’s biggest developer, said government measures to curb property speculation are “incremental” and will help the real estate market develop sustainably over the long term.
Singapore raised down payment requirements in August for second mortgages and imposed a stamp duty on homes held for less than three years to curb speculation after prices surged. It will sell 17 residential sites in the first half of 2011, matching the record land sales in the second half this year, it said yesterday.
“You must let the government test the market with incremental measures and see the results,” Liew Mun Leong, CapitaLand’s chief executive officer, said in an interview in Singapore yesterday. “If you’re a long-term player, you’d want the government to do something incremental if there’s overheating. You don’t want something big to kill the market.”
Singapore and Asian markets including Hong Kong, Taiwan and China imposed measures including higher down payments this year to cool their property markets amid concerns that asset bubbles are forming. Home prices in Singapore climbed for five quarters to a record in the three months ended Sept. 30 as the island forecasts a record 15 percent expansion this year.
CapitaLand shares have fallen 6.8 percent since the government announced its measures on Aug. 30, compared with a 7.5 percent advance in the benchmark Straits Times Index.
The central bank said yesterday low borrowing costs and excess liquidity globally may push the property prices higher again, setting back efforts to cool the market.
The government said the 17 sites will yield 8,100 apartments. Another 13 properties may also be sold in the first half, where developers may build an additional 6,200 homes, it said in yesterday’s statement. An auction for the 13 sites will be triggered when the government gets bids that meet its minimum prices for each site, it said.
CapitaLand, which yesterday unveiled its latest residential development in the city, said it’s interested in bidding for the sites and will study the list of properties. The government measures haven’t affected prices so far, according to Liew.
“Prices are not falling,” he said. “Demand is still good and developers are still trying to build up their inventory.”
CapitaLand yesterday priced the first 200 apartments at its 1,715-home d’Leedon residential project close to the city’s downtown at S$1,680 ($1,284) a square foot. The company spent S$3 billion on the development previously called Farrer Court, including land and construction costs.
Partners for the project include Hotel Properties Ltd., a unit of Wells Fargo & Co. and a fund managed by a unit of Morgan Stanley.
To contact the editor responsible for this story: Andreea Papuc at email@example.com