SINGAPORE (Feb 13): Singapore housing prices may rise as much as 10% this year, following a pickup in home sales, the chief executive officer of Southeast Asia’s biggest developer said.
“Transaction volume has gone up and usually that’s a precursor to some price increase,” Lim Ming Yan, the president and CEO of CapitaLand said in an interview in Singapore. “A 5%-to-10% increase is possible this year barring any unforeseen major volatility in the capital markets.”
Lim was speaking after the developer said net income fell 38% to $267.7 million in the three months ended Dec. 31 after finishing fewer homes to sell in China.
Still, CapitaLand shares rose 2% to $3.54 at 11.59am in Singapore, the biggest advance since Oct 5, after the company raised its full-year dividend 20%.
Rising prices and climbing sales are reinforcing signs the city-state’s residential market is emerging from a four-year slump. Developers have been aggressively bidding for land on the back of the recovery.
CapitaLand, which has largely stayed away from the bidding war, said Tuesday it bought a redevelopment project near the central business district for $728 million, which it will turn into an 800-unit residential complex.
“We continue to look for opportunities in Singapore but we feel the kind of bidding, the price, is too aggressive for us,” Lim said. “We bid in a very disciplined manner.”
Lim’s view is in line with other forecasts. Home prices may rise as much as 10% this year, according to analysts at Credit Suisse Group AG, while Morgan Stanley and OCBC Investment Research expect as much as an 8% increase, according to reports from the brokerage firms.
