City Developments Leads Builders Lower on Curbs: Singapore Mover
City Developments Ltd. (CIT) paced declines by Singapore developers on concerns the government may introduce additional measures to cool the housing market after home sales in April rose to the highest in three years.
City Developments, the island’s second-biggest developer, fell 2 percent to S$10.05 at the close in Singapore, the lowest since Feb. 2. The FTSE Strait Times Real Estate Index of 42 property stocks slid 1.4 percent to a three-month low. CapitaLand Ltd. (CAPL) dropped 1.1 percent and Keppel Land Ltd. (KPLD) declined 1.4 percent.
“We believe more cooling measures are likely, given that suburban private property prices remain elevated,” Wilson Liew, an analyst at Maybank Kim Eng Holdings Ltd. in Singapore wrote in a note today. “The government is watching the increasing trend of shoebox units, which are less than 550 square feet, very closely.”
Liew expects home prices to decline by 10 percent by 2013.
Singapore’s April private home sales climbed 3.9 percent to 2,487 units last month, the highest in almost three years, according to government data released yesterday.
Home sales remained above 2,000 units in each of the previous three months as buyers invested in so-called shoebox apartments. Singapore may introduce measures to regulate the sale of such homes after a record number were sold in the first quarter, Khaw Boon Wan, Singapore’s National Development minister, said in Parliament on May 14.
Developers sold 1,764 shoebox apartments in the three months ended March 31, the most since the Urban Redevelopment Authority began collating the data in 2007. The smaller units accounted for 27 percent of new sales in the first quarter when private home prices fell for the first time in almost three years following curbs including more stringent mortgage requirement and higher taxes.
Singapore plans to release five residential sites this month where developers could build about 2,100 apartments, the government said yesterday. The city-state’s land sales for the first half are expected to add about 14,000 homes, it said.
To contact the reporter on this story: Pooja Thakur in Singapore at firstname.lastname@example.org
To contact the editor responsible for this story: Andreea Papuc at email@example.com