CDL : Suburban home prices may still inch up
Despite stock market and economic uncertainty, prices of well-located suburban homes near MRT stations might still inch up 1% to 3% in the second half of the year, says City Developments (CDL) executive chairman Kwek Leng Beng.
Developers are likely to keep prices stable as demand for such homes is still healthy, he said at the firm's Q2 results briefing at M Hotel yesterday. CDL reported a 17% surge in net profit to $221 million for the 3 months ended Jun 30. Mr Kwek offered a different outlook for homes in less prime locations.
He also said that the Government will probably not introduce more cooling measures for the market. 'I don't believe (the Government) will come out with new measures to destabilise the market, especially after S&P re-rated the US credit rating; the world is suddenly more uncertain now,' he added. The Government is more concerned about the public housing sector where it has already made various policy changes, Mr Kwek noted.
'With a low interest rate environment, developers here will be mindful of market appetite which will be a major factor in deciding the timing of their launches and purchase or tender for development sites,' CDL added. Low interest rates, uncertainty and volatility in the equity market and the lack of other suitable investment opportunities also continue to prop up demand, limiting the fall in pprty prices even in the case of some oversupply.
On the commercial front, Mr Kwek remains confident that the office sector will stay steady and healthy.
Source : The Business Times, 13 Aug 2010
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