SINGAPORE Jan 14 (Reuters) - Shares in Singapore property developers took a beating after the government launched sweeping measures to cool the housing market, where strong demand has persisted despite a weak economy and previous efforts to slow rising prices.
The property sector, last year's best performer on the Singapore Exchange with a 48 percent jump, fell as much as 2.7 percent, its biggest drop since May 2012.
Shares in major developers CapitaLand Ltd lost more than 4 percent, while Keppel Land Ltd and City Developments Ltd both shed more than 6 percent, dragging the main index 0.5 percent lower.
"We think the reaction to this set of comprehensive measures will be the most significant thus far, relative to the earlier six rounds," Barclays Bank said in a report.
"Coupled with the large supply pipeline of public and private housing over the next few years, we think property prices will very likely stabilise, if not fall, this year."
The government's action, its seventh attempt to temper the market since late 2009, comes as the ruling party also tries to curb the influx of foreigners. Locals have complained of overcrowding, as well as stiffer competition for jobs and housing.
Foreigners and corporates who buy residential property in Singapore will be subject to an additional buyer's stamp duty (ABSD) of 15 percent of the purchase price, up from the previous 10 percent.
The city-state also introduced, for the first time, a seller's stamp duty of 5-15 percent on those who buy, then within three years sell, industrial properties such as warehouses and factories.
The measures introduced late on Friday come as interest rates, which are near record lows in Singapore, have fuelled a nearly 60 percent rise in private residential prices since they hit a trough in the second quarter of 2009 after the global financial crisis.
Homebuyers can pay as little as 1 percent per annum on their mortgage loans.
Resale prices of government-built HDB apartments, which house about 80 percent of Singaporeans, have also surged.
Tighter loan measures affected bank stocks across the board on Monday, with DBS Group Holdings Ltd, Oversea-Chinese Banking Corp, and United Overseas Bank down between 1.2 percent and 1.7 percent.
"The government is serious about addressing affordability for new Singaporean homebuyers," said Kristy Fong, an investment manager at Aberdeen Asset Management PLC. "Therefore the intent is for the property market to cool, but not crash given that they are clear about these measures being temporary depending on future market conditions." (Writing by Ansuhman Daga; Editing by Daniel Magnowski)