Singapore property expected to stabilize<\/p>\n
SINGAPORE (Reuters): Singapore's property sector is expected
\nto stabilize this year following a price collapse of more than 40
\npercent since mid-1996, analysts said.<\/p>\n
But recovery is expected to be patchy with mid- and lower-
\nrange private home prices showing more buoyancy than the high
\nend. In the commercial sector, prices are continuing to fall
\nbecause of a growing overhang of unleased space.<\/p>\n
\"We think the downside from here is limited. On the
\nresidential side...in the higher end, prices are still a bit
\nfluid,\" said Lam Wei Siong, property analyst at Morgan Stanley
\nDean Witter.<\/p>\n
Many analysts said the price falls and lower interest rates
\nhad led to a sharp increase in new home sales. Latest data from
\nthe Urban Redevelopment Board show developers sold almost 3,000
\nnew homes in the last quarter of 1998, up 200 percent over the
\nthird quarter.<\/p>\n
\"I think this suggests that the property market has bottomed,
\nespecially for the lower end,\" said Ng Yeow Tong, analyst at G.K.
\nGoh Research.<\/p>\n
But a sharp recovery is not expected any time soon.<\/p>\n
URA data put supply at the end of 1998 at 16,568 units.
\nAnalysts expect new home sales to remain flat to 10 percent more
\nthan 1998's 6,000.<\/p>\n
\"If developers don't push up prices too quickly, I think sales
\nmomentum should be sustained this year. The lower end of the
\nmarket is very price sensitive,\" Ng said.<\/p>\n
The expected turnaround in the property sector has prompted
\nsome broking houses to switch to overweight in selected property
\nstocks despite the fact that almost all will report record losses
\nfor 1998.<\/p>\n
Most brokers like City Developments, a clear leader in the
\nsector with a large and cheap land bank and one of the few
\nproperty firms to report a profit for 1998.<\/p>\n
\"It has a very strong balance sheet,\" said Gregory Lui,
\nanalyst at SG Securities.<\/p>\n
CityDev's blue chip status also means it is trading at a
\npremium to the company's net asset value, which analysts put at
\nslightly more than S$6 a share.<\/p>\n
\"Based on valuations, it is hard to justify a buy for CityDev
\ngiven the cycle that the property market is in at the moment,\"
\nLam said.<\/p>\n
Some broking houses recommend First Capital Corp as it is a
\nleader in the lower-end housing market which is seeing the most
\nactivity.<\/p>\n
\"We believe FCC to be the biggest beneficiary of strong demand
\nfor entry-level private housing,\" Salomon Smith Barney analyst
\nSoon Ching Voon said in a report.<\/p>",
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