July 24 (Bloomberg) -- Home prices in Singapore will probably extend declines as the government sticks with curbs, according to Keppel Land Ltd., 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.”
The FTSE Straits Times Real Estate index, which tracks 49 property companies, fell less than 0.1 percent at the close in Singapore, after dropping as much as 0.4 percent earlier, the first decline in eight days. Keppel Land stock rose 0.9 percent to S$3.54, the highest close since April 21.
Singapore’s home sales by volume fell 68 percent 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 percent of a borrower’s income, higher stamp duties on home purchases and an increase in real-estate taxes.
“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 percent to S$107.2 million ($86.6 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 percent to S$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 percent to 209.3 points in the three months to June, following a 1.3 percent 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 percent this year compared with the 8 percent advance in the Straits Times Real Estate Index. The stock ended at S$3.51 yesterday, the highest close since May 26.
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