Wednesday, April 18, 2012

New cooling measures looming, say brokers

The government is expected to implement a new set of cooling measures following the recent surge in private home sales, particularly in the mass market segment, according to brokers.

“The bulk of the strong volumes represent demand for small mass market units that are substantially investment-driven in our view,” said CIMB Research.

On the other hand, bigger units which are usually preferred by owner-occupiers have seen weaker take-up rates.

As a result, “with mass market prices showing little signs of relenting, we see pressure mounting for further tightening measures,” noted CIMB.

CIMB has also retained a neutral rating for the sector, underlining CapitaLand Ltd as its top choice and giving City Developments Ltd an underperform rating. Outperforming the broader market, CapitaLand shares slipped 1.7 percent at S$2.9 and gained 31 percent so far this year.

Private home sales surged to 6,682 units excluding ECs (executive condominiums) in Q1 2012, the highest figure since 1996 when the URA (Urban Redevelopment Authority) first compiled such data.

“We do not discount the possibility of further measures in the shoe-box segment, although we highlight the volumes are supported by favourable interest rate environment, affordability levels and strong liquidity,” said Credit Suisse.

View the original article here

Source From Property Guru

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