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With China’s residential market going into a centrally-ordered deep freeze, there are signs that Singapore may be an unexpected beneficiary, as news headlines this week carry stories of rebound in developer stocks and growing demand for housing sites.
Also in the news, a mainland developer wins with a suburban Sydney project, and there’s much more if you just keep reading.
Singapore property stocks are set for their best annual performance in five years, and strategists believe the rally is far from over.
With an expected pickup in real estate following the easing of housing curbs, developers are expected to be the bright spot in Singapore equities as gains in the city-state’s stocks may be limited for the rest of the year.
Property stocks including City Developments Ltd. and UOL Group Ltd. are already driving gains in Singapore stocks so far this year, with developers and property trusts making up more than half of the 10 best-performing stocks on the Straits Times Index.
Hong Kong’s Banks Said Well-Equipped for a Property Downturn
Hong Kong’s banks are better prepared than 20 years ago for a crash in the property market – even amid the world’s costliest apartments – because they are better capitalised and less exposed to real estate loans after the regulator forced them through eight rounds of mortgage tightening measures, the Hong Kong Monetary Authority’s chief executive said.
“[While] nobody can predict when the next crisis will arrive, Hong Kong’s financial sector is now well prepared for that,” Chan said in an interview with the South China Morning Post.
“In 1997, many homebuyers only needed to pay 10 per cent of the value of the property,” Chan said. “When the property price dropped 10 per cent, these homeowners fell into negative equity.”
The city’s mortgages now make up 51 per cent of property values on average, reduced from 64 per cent in 2009 after eight rounds of tightening. Two decades ago, mortgages were 70 per cent of property values while the developer would lend 20 per cent.