Hot stocks: Property plays slip into negative territory upon ABSD hike

PROPERTY counters in Singapore started Thursday (Apr 27) largely in the red after the government stepped up Additional Buyer Stamp Duty (ABSD) rates for residential properties.

After falling S$0.29 or 4 per cent to S$7.03 at the opening bell, City Developments continued its downward trajectory to trade at S$6.88 as at 2.51 pm, down S$0.44 or 6 per cent.

UOL Group lost S$0.38 or 5.3 per cent to hit a low of S$6.81 as at 11.50 am, recovering slightly after the midday break to S$6.89 – down S$0.32 or 5.3 per cent as at 2.51 pm.

Both property giants are Straits Times Index constituents.

Other developers on the decline included  Tuan Sing , which fell S$0.01 or 3 per cent to an over two-week low of S$0.325 as at 2.47 pm.

GuocoLand shed S$0.04 or 2.5 per cent to S$1.58 as at 9.08 am, before it clawed back marginally to S$1.59, down S$0.03 or 1.9 per cent, to S$1.59 as at 3.58 pm.

Oxley was down S$0.001 or 0.7 per cent at S$0.136 as at 10.23 am. Prior to that, the counter had been trading S$0.002 or 1.5 per cent lower at S$0.135.

The recent share price movements came in line with OCBC Investment Research’s expectations of a “negative knee-jerk reaction” to developers with material exposure to the Singapore residential sector.

In a research note on Thursday, it noted the possibility of an overhang affecting near-term price performance, although valuations appeared cheap.

“We believe CapitaLand Investment (CLI) would be relatively unscathed, given that it does not have direct Singapore residential exposure post its restructuring,” added the research house.

Shares of CLI dipped S$0.08 or 2.1 per cent to S$3.81 as at 9.01 am on Thursday. By 3.26 pm, the real estate manager regained its footing to S$3.88, down S$0.01 or 0.3 per cent.

Real estate agencies were also on a downtrend in early trade.

PropNex tumbled S$0.13 or 6 per cent to S$2.02 at the open, recouping slightly after the midday break to trade S$0.10 or 5.7 per cent lower at S$2.05 by 3.07 pm.

Apac Realty dropped as much as S$0.0225 or 7.6 per cent to S$0.605 as at 9.03 am. The real estate services provider, however, posted a stronger share price recovery back to S$0.615 as at 3.15 pm, representing a S$0.04 or 6.1 per cent decline from the previous day’s close. 

From Apr 27, the ABSD for Singapore citizens for the purchase of their second property will be raised to 20 per cent from 17 per cent, and to 30 per cent from 25 per cent for their third and subsequent properties.

Singapore permanent residents will experience ABSD raised from 25 per cent to 30 per cent on their second property and from 30 per cent to 35 per cent for their third and subsequent properties.

Foreigners bear the brunt of the increases, with ABSD on any property purchase doubled from 30 per cent to 60 per cent.

Singapore’s government said the new measures are meant to “pre-emptively manage investment demand”. They are estimated to impact about 10 per cent of all residential property transactions.