SINGAPORE — City Developments Limited, the second-largest developer in the Republic, has flagged concerns about a downward spiral of property prices if the current declining trend continues, but it is confident that the government will take “timely action” if such a scenario arises.
“The general trend in a downturn cycle is that residential sales volume will start to fall and prices will dip slightly, leading to a more acute downward pressure, with spiralling effects, as panic selling or forced sales seep in. This applies across all segments of the residential property market,” said executive chairman Kwek Leng Beng.
“Various industry stakeholders have called for the Government to review and tweak some of its measures. The timing of when to review the cooling measures is a judgment call. (We are) hopeful that timely action will be taken by the Government if and when the situation warrants it.”
Despite the headwinds in the Singapore market, Mr Kwek said residential projects that tick the right boxes can still attract buyers, as evident by the company’s joint-venture developments Coco Palms and Commonwealth Towers, which have, respectively, sold 86 per cent and 78 per cent of the units released.
City Developments’ relatively resilient property development business helped increase its revenue by 5.9 per cent to S$861.1 million in the second quarter of this year. But net profit fell 32.8 per cent to S$137.9 million due to the absence of divestment gains that boosted earnings in the same period last year. On a like-for-like comparison, profits were 89.7 per cent higher in the three months to June.
City Developments said it intended to launch its District 9 freehold condominium, New Futura, subject to market conditions.
As the home market remains challenging, with cooling measures still working their way through the property sector, the developer is looking to accelerate its overseas expansion plans. It has made steady progress in markets such as the United Kingdom and China, and plans to make further inroads into Japan and Australia, said chief executive Grant Kelley.
“In the short term … whether it’s London residential, Japanese hospitality, Chinese residential or mixed-use developments, we’ve got a very clear direction and we will carry that forward with our other geographic expansion in the coming years,” he said.
credits: Today online