SINGAPORE Jan 14 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
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
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
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
Homebuyers can pay as little as 1 percent per annum on their
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)