Property sector takes stock

NEWS that private home sales slowed last month battered property stocks yesterday, but analysts are not interpreting the numbers to mean the start of a downturn for the sector just yet.

Forty-three of the 52 listed property shares were down. Among the biggest price-percentage losers were LC Development and Orchard Parade Holdings, which were down 5.9 per cent and 4.5 per cent to $0.48 and $1.90, respectively.

“We expected the fall in launches, because in the last couple of months, the Hungry Ghost festival and the sub-prime issue coincided,” said Kim Eng investment analyst Wilson Liew.

“The new legislation regarding en-bloc sales also caused some uncertainty.”

According to data from the Urban Redevelopment Authority, 570 new housing units were launched and 529 homes sold in September, compared with 1,731 units sold the month before.

The fall in property prices, analysts said, was a typical knee-jerk reaction to the numbers.

Besides, said Knight Frank property consultant Nicholas Mak, “the sales in August were exceptionally high,” making the numbers for last month look particularly weak.

Indeed, said Kim Eng’s Mr Liew, with the reduced launches recently, developers could pick up the slack and increase their sales in coming months.

“We’re still in the property upcycle, the property stocks should continue to do well,” he said.

Source : Today – 17 Oct 200

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