December 16, 2021

Singapore property developers’ shares hit by new cooling measures but banks resist declines

By ellen

SINGAPORE – The shares of Singapore developers took an immediate hit on Thursday morning (Dec 16) from property cooling measures announced overnight, but local banks resisted declines with support coming from the United States Federal Reserve move to raise interest rates in 2022 at a faster pace.

At close to midnight on Wednesday, the Government announced a new round of property curbs to cool the private residential and Housing Board resale markets after prices surged despite the Covid-19 pandemic.

With effect from Thursday, additional buyer’s stamp duty rates will be raised, and the total debt servicing ratio threshold will be tightened.

The limit for housing loans for HDB flats will also be lowered from 90 per cent to 85 per cent. In addition, the Government will increase public and private housing supply to cater to demand.

Shares of City Developments Limited (CDL) fell on the news, with CDL down 24 cents, or 3.4 per cent, to $6.83 at 9.25am.

UOL Group shares lost 14 cents, or 1.97 per cent, at $6.96.

PropNex, a real estate agency that has benefited from the red-hot property market, sank 20 cents, or 11.2 per cent, to $1.58.

Local banks, which have a lucrative market in home loans, found support from the US central bank shifting to end its asset-buying programme earlier and signalling three rate hikes for next year.

Shares of DBS Bank edged up six cents, or 0.19 per cent, to $31.96, while UOB edged up four cents, or 0.15 per cent, to $26.72.

OCBC Bank inched down one cent, or 0.09 per cent, to $11.28.

The Straits Times Index meanwhile was up 0.14 per cent as at 9.25am.