Slowing home sales are expected to see the value of stocks in Singapore and Hong Kong property developers fall further, according to media reports.
Singapore’s FTSE Straits Times Real Estate Index and Hong Kong’s Hang Seng Property Index fell to their lowest levels for almost 18 months last week, on the back of cooling measures that have curbed property prices in both cities.
Home prices in Singapore declined by 0.9 percent during the last quarter, while the Centaline Index in Hong Kong is down 4.3 percent from its previous high. Home sales in Singapore are at a four-year low while those in Hong Kong are at their lowest levels for almost 20 years.
Home builders from both cities also make up eight of the 10 worst performers in the 101-strong MSCI World Real Estate Index over the course of the last 12 months. Stocks of Southeast Asia’s largest builder CapitaLand have declined by 25 percent while stocks in Hong Kong’s Sun Hung Kai have tumbled 22 percent.
“I wouldn’t buy (HK and Singapore) developers at this stage as governments’ housing policies are working against them,” said Nader Naeimi, Head of Asset Allocation at Sydney-based AMP Capital Investors, in an interview with Bloomberg.
Naeimi is more bullish on U.S. and German property firms, and predicts a further 15 percent fall is possible for Singapore and Hong Kong property company stocks.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
Recent stories you may have missed:
The reality of Singapore’s private resale market
TDSR exemptions for 40% of Singaporeans
500 cheques collected in advance of condo launch
Private home prices to rise by 2%: Savills
If you have a property story you want us to publish email: andrew@propertyguru.com.sg