Property Sector Update (31 July 09)

DMG & Partners recently launched a research article on the Property Sector in Singapore stating that it was too early to sell and maintain its OVERWEIGHT position. A summary of the its key findings are as follows:

1. Even though the Singapore government seems to be concerned over the speculative signs rising in the property market based on comments by Minister Mah Bow Tan, an OVERWEIGHT rating is still given with CityDev as the top pick with a target price of $12.00. Reason being that though speculative signs are showing in the property market, they are not yet excessive and it was too early to say that a property bubble was emerging.

2. The government also seems increasingly concerned with speculation that is ongoing and has recently introduced an amendment to taxes regarding capital gains arising from the speculative trading of property.

3. A move towards supply oriented measures with the Government Land Sales (GLS) program to be brought back if necessary. This might be the possible move in the near future and would bode well for the recovering property market versus demand oriented measures.

Time to load up on CityDev Stocks?