Going forward, he believes the latest cooling measures are also to prevent a build-up in the supply pipeline, with en-bloc purchases to hit a pause due to a growing disconnect between sellers’ and developers’ price expectations.
CapitaLand remains his top “buy” pick with a target price of $3.95, as the stock is expected to see minimal impact from policy measures. The analyst also maintains “buy” on APAC Realty with a 77-cent target price, as he expects its lower sale volumes to be partially offset by higher developer commissions.
See: Expected to emerge unscathed from latest curbs, CapitaLand is RHB's top large-cap 'buy'
Due to its large Singapore residential exposure, City Developments (CDL) has been downgraded to “neutral” from “buy” previously. The stock has been given a target price of $10.40.
See: City Developments cut to ‘neutral’ on expected slowdown in Singapore properties and Brexit woes
“For 2019, we expect property prices to see a modest growth of 0-2%. Key supporting factors are replacement demand and liquidity from en bloc and stable job market. Key threats to our assumptions include spike in interest rates and prolonged trade war tensions impacting Singapore economic growth,” says Natarajan.
As at 3.22pm, shares in CapitaLand, APAC Realty and CDL are trading at $3.22, 62 cents and $10.11, respectively.
