Singapore's once high-flying property market remained depressed in the first quarter of this year amid a deepening recession, government data and company results showed Friday. Private residential home prices dived 14.1 percent in the three months to March, the sharpest quarterly fall since 1975 when the government started compiling such data, the Urban Redevelopment Authority said.
The decline surpassed a 13.2 percent fall in private home prices recorded in the third quarter of 1998 during an Asian financial crisis, it said. "Going forward, the momentum of the primary market will depend on what projects the developers are going to launch and at what price-points," said Li Hiaw Ho, executive director of CB Richard Ellis Research. "We expect price moderation to continue for both new and relaunched projects."
News of tumbling home prices came as CapitaLand, one of Asia's biggest property firms, said its first quarter net profit fell 83 percent from a year ago as the global economic crisis hit home sales and commercial rentals. Net profit in the three months to March was 42.90 million Singapore dollars (28.67 million US). Revenue came in at 487 million dollars, down 23 percent from the previous year, the company said in a statement.
"Homebuyer sentiments in the group's key markets of Singapore, China and Australia remained cautious in the first quarter and, as expected, were reflected by low transaction volumes," said chief executive Liew Mun Leong. "We do not expect a quick and sharp turnaround in global property markets," he said, describing the outlook for the rest of the year as "challenging."
Revenue from overseas operations accounted for 68 percent of CapitaLand's overall first quarter turnover, with Australia and China remmaining the main contributors Separately, Keppel Land, one of Singapore's major property developers, announced a rights issue to raise about 712.3 million dollars.
Keppel Land said the rights issue will strengthen its balance sheet and "provide additional financial flexibility... to pursue strategic opportunities in its core markets, as and when opportunities arise." The company, which reported a 38.8 percent drop in net profit in the first quarter, said it was "in a strong financial position to weather the current downturn."
Stung by falling demand for its exports due to a global economic slump, trade-dependent Singapore faces its worst recession in more than 40 years this year. The government is forecasting national economic output to plunge by as much as nine percent this year.