Residential Market “Bottoming Out”

Posted by

Singapore’s biggest developer, CapitaLand, detects signs that the residential property market is “bottoming out” after a run of price declines, its chief executive officer Lim Ming Yan said on Thursday (Aug 3).

Many investors see Singapore as relatively more attractive than Hong Kong, London or Australian cities, Mr Lim, who’s also president of the firm, said in a Bloomberg TV interview. Extra liquidity was a factor in higher transaction volumes and slower price declines in recent months, he said.

“For a rebound to take place on a more sustainable basis, there has to be overall improvements in the fundamentals,” Mr Lim said.

The government’s efforts to cool a red-hot market have triggered a record 15-quarter decline in home prices, in contrast with cities such as Hong Kong, where property prices keep soaring to records. In March, Singapore eased some restrictions, but cautioned that those adjustments did not signal any bigger unwinding of curbs.

Singapore’s restrictions are “a very stringent policy”, so further tightening isn’t likely, Mr Lim said. “At the same time, given the current market conditions, it’s unlikely that we will see a relaxation, certainly not within this year.”

Home sales jumped 72 per cent during the first half from a year earlier as developers sold 6,567 units, according to the Urban Redevelopment Authority.

Mr Lim was commenting after CapitaLand said net income almost doubled to S$579 million in the three months ended June 30 from a year earlier. Revenue declined 12 per cent to S$992 million.

Assets in China made up 43 per cent of the S$44 billion CapitaLand portfolio as of June and he said in the interview that he would be comfortable if that rose to 50 per cent.

CapitaLand shares have gained 23 per cent this year.