The longest losing streak in Singapore residential prices in 17 years may prompt the government to take its foot off the brakes and relax some property curbs this year, the city-state’s second-biggest developer said.
Kwek Leng Beng, the billionaire executive chairman of City Developments, which built luxury condominiums such as the St Regis Residences near the Orchard Road shopping belt, said mid-income and low-end housing could see further price declines and the high-end market remains subdued.
“They will press the button at the right time although developers are hoping they will do it sooner than later,” Kwek said after the company’s earnings briefing on Thursday. “I think they will do something this year, that’s my speculation, as there are a lot of mid- and low-end homes coming up. I suspect it will be the abolishing of the buyer’s stamp duties.” Singapore has been successful in cooling its property market with a slew of measures to tame record prices set in 2013. They have included a cap on debt repayment costs at 60% of a borrower’s monthly income, higher stamp duties on home purchases and an increase in real estate taxes.
Home values have dropped 8.4% from the peak in 2013 and sales have since declined to about half the level that year. The government needs to calibrate cooling measures imposed on Singapore’s property market to engineer a soft landing, the Real Estate Developers’ Association of Singapore president Augustine Tan said this month.
City Developments posted a 6.7% increase in fourth-quarter profit to S$410.5mn ($293mn) in the three months ended December 31. The developer is trying to mitigate risks in Singapore by expanding overseas to markets such as China, Japan and UK. The company is expanding its fund-management platform and has completed two deals valued at S$2.6bn since December 2014. It is on target to grow fund assets under management to S$5bn by 2018.