Tighter property rules in HK send S’pore stocks up

Property stocks propelled higher in the Singapore Exchange yesterday buoyed by expectations that the property cooling measures out of Hong Kong may prompt more mainland Chinese buyers to turn to Singapore for their property investments.

Shares of property giant City Developments rose by 4.1 per cent to $13.30 in yesterday’s trading.

Keppel Land shares also got a 2.4-per-cent boost to close at $4.26, while CapitaLand gained 0.72 per cent to $4.20 and Wing Tai Holdings rose by 0.56 per cent to $1.78.

Analyst said the expected influx of property buyers from China may cause property prices here to escalate, boosting profitability for developers here.

Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said: “Every time cooling measures are applied in China and Hong Kong, we can expect Chinese property investors to redouble their efforts in their search for alternative places to invest in.”

He added: “Singapore continues to climb up higher on their list.”

Experts said Chinese buyers formed about 16.4 per cent of foreigners who bought Singapore properties this year, with a total value of around $1.4 billion.

Still, some analysts warned the influx of Chinese property buyers here may spur another round of cooling measures in Singapore’s property market.

Credo Real Estate’s executive director of residential services Liang Thow Ming believes that “Hong Kong’s tightening efforts could have a psychological impact on buying sentiment in Singapore”.

This may be in the form of heightened fears of additional cooling measures introduced in Singapore’s property market.

Meanwhile, most analysts believe the overall impact of the measures will be limited as not many Singaporeans invest in the Hong Kong property market anyway.

Mr Donald Han, managing director at Cushman and Wakefield said, “Hong Kong is not a hot-bed for Singaporean investors.”

Mr Han added that traditional Singaporean investors tend to go for property markets such as Australia and the United Kingdom, where property cycle movements are less drastic.

Measures outlined by Hong Kong chief executive Donald Tsang yesterday (13 October) included a halt to automatic residency for wealthy Chinese buyers, effectively preventing investors from gaining residency in Hong Kong through property purchases.

Mr Tsang was responding to public concerns in Hong Kong about a housing shortage and property prices spiralling out of control.

Average home prices in Hong Kong have climbed by 15 per cent so far this year.

Source : Today – 14 Oct 2010

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