(Corrects to add missing word in paragraph 3)
Singapore's latest measures to cool its property market by
capping the tenure of new home loans at 35 years, may result in
lower transaction volumes for a few months before picking up
again, Nomura said.
At 0117 GMT, shares in CapitaLand Ltd, Southeast
Asia's largest property developer, were down 2.7 percent at
S$3.21, while smaller rival City Developments Ltd fell
1.3 percent to S$11.79.
Over the last three years, the average tenure for new
residential property loans has increased from 25 to 29 years and
more than 45 percent of new residential property loans granted
by financial institutions have tenures exceeding 30 years, said
the Monetary Authority of Singapore.
Nomura also noted that unless home buyers have ample
capital, mortgage repayment could now be 24-45 percent higher.
The brokerage's top pick among Singapore residential developers
is Keppel Land Ltd, as it trades at a discount of 41
percent to its net asset value.
"In reality, however, we suspect the market will still find
its way around the new rules," said Nomura, adding that negative
impact on stock prices of developers is likely to be limited.
CIMB Research said the Singapore government's move was
pre-emptive in nature and unlikely to hurt demand much, given
low mortgage rates and demand for smaller units.
"While the impact on demand may be mild, the government's
pledge to keep prices down signals further policy headwinds for
developers," said CIMB, which kept its 'neutral' rating on the
sector. Its top picks include CapitaLand and CapitaCommercial
Trust, for which it has 'outperform' ratings.
0919 (0119 GMT)
(Reporting by Charmian Kok in Singapore;
email@example.com; Editing by Prateek Chatterjee)