Singapore property developers' shares hit by new cooling measures but banks rise

The Government announced a new round of property curbs to cool the private residential and HDB resale markets at close to midnight on Dec 15, 2021. PHOTO: ST FILE

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 as low as $6.80 at 9.20am, losing 27 cents or 3.8 per cent on the news. By the midday trading break, it pared the losses to trade down 21 cents or 2.97 per cent at $6.86.  

UOL Group shares were nine cents or 1.27 per cent lower at $7.01.

PropNex, a real estate agency that has benefited from the red-hot property market, sank 24.5 cents, or 13.8 per cent, at 9.08am. The stock regained some ground by noon to trade down 11 cents, or 6.18 per cent, at $7.01.

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.

Building on their gains through the morning, shares of DBS Group Holdings were up 24 cents, or 0.75 per cent, to $32.14 by noon, while UOB rose 29 cents, or 1.09 per cent, to $26.72. OCBC Bank edged up two cents, or 0.18 per cent, to $11.31.

The Straits Times Index meanwhile was up 6.07 points, or 0.19 per cent, at midday.

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