CityDev's massive unsold landbank is key target for cooling measures | Singapore Business Review
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CityDev's massive unsold landbank is key target for cooling measures

It faces heightened difficulty to sell its unsold stock.

City Developments should brace for a downturn in the immediate term as the government’s cooling measures are expected to hit the developer who currently has the largest inventory of new units for launch, according to DBS Research.

The developer may face greater difficulty in unloading its unsold stock to a market that may not be as inclined to snap up properties after the government tightened Loan-to-Value (LTV) limits by 5pt in surprise cooling measures.

“Post the implementation of the tightening measures, management has turned cautious on the sector and expects property prices to decline by some 5-7% and sales volume to slow down,” said DBS analyst Rachel Tan.

Also read: Hotel arm could buoy CityDev amidst property curb

The government raised the Additional Buyers Stamp Duty (ABSD) rates by 10ppt or 15% to 25% for developers after private home prices rose 9.1% over the past year and transaction volumes ballooned on the back of heated demand.

The launch of South Beach Residences and Boulevard 88 were even put under review following the government’s property curbs, added Tan.

As a result, City Development is looking to beef up its commercial property segment through acquisitions to offset the weakness in the residential market. It recently acquired an office block (4k sqm GFA) in Shanghai’s North Bund Business District for $30m (RMB148m).

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