Depressed since Polling Day, property stocks slipped further on Friday, after the government released an abundant supply of sites for the second half of the year.
Several market analysts believe that while more demand-side measures to cool the real estate market are possible, much of the policy risk has already been priced into property stocks.
The FTSE ST Real Estate Index slipped slightly by 0.9 percent, after the Ministry of National Development (MND) announced its plan to sell new land for at least 17,510 private homes and executive condominium (EC) units in 2011.
MND launched 17 residential sites on the confirmed list of the 2H2011 Government Land Sales (GLS) programme. Overall, these sites can potentially reap some 8,115 new private homes and EC units.
Analysts believe that the abundant supply was greatly expected.
“As expected, a strong pipeline of residential supply is maintained in the H2 2011 GLS programme, in response to the need to provide more mass market housing and the government’s intention to keep accelerating prices in check,” said Lock Mun Yee, DBS Group Research analyst.
Wendy Koh, a Citigroup analyst, added, “Developers sold a total of 1,788 units (excluding ECs) in April (an increase of 29 per cent month-on-month), which is a five-month high. If we continue to see high volumes in May (post-election), we do not rule out the possibility of more measures.”
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