Singapore’s property stocks fell, driving an index tracking developers to a one-year low, after the government tightened its public housing policy by reducing tenures for new loans and restricting purchases by foreigners.
The Singapore property index tracking 43 stocks fell 1.4 percent to 692.64 at the close in Singapore trading, the lowest since Sept. 11. Singapore will cut the maximum tenure for new loans to purchase homes built by the state to 25 years from 30 years, the Housing & Development Board said in a statement on its website. Mortgage payments are capped at 30 percent of their gross monthly income, down from 35 percent.
With 82 percent of Singaporeans living in government-built apartments, housing rules have been used to encourage the development of families and other government policies. Public housing regulations also affect private developers because the companies rely on these homeowners to upgrade to condominiums.
“These measures continue to be negative for the Singapore private residential market, given that upgrader demand has contributed to a significant portion of mass-market private residential housing demand,” Citigroup Inc. analysts Adrian Chua and Ivan K. Lim said in a report yesterday. “A weaker HDB resale will impinge on upgrader households’ ability to monetize their flats.”
CapitaLand Ltd. (CAPL), the city’s biggest developer, lost 2.3 percent to S$2.93, the lowest since July 24, 2012. City Developments Ltd., the second largest, dropped 2.2 percent to S$9.76.