According to CIMB, current market conditions, including property cooling measures, residential oversupply and lower development margins brought about by costly land have affected Singapore’s property developers more than the Global Financial Crisis in 2008.

“After the implementation of a series of macro-prudential measures by the government, including higher transaction costs and more prudent debt servicing measures, demand for residential property has weakened.

This, coupled with a slow rental market and rising incoming supply, has led to higher vacancies and deteriorating private home prices,” said Analyst Ms Lock Mun Yee in a CIMB report.

“With revenue growth decelerating and the bottomline being affected by narrower margins, developers are increasingly looking to overseas markets such as Australia, the UK, China and other SEA countries.

The bright spot is that developers’ balance sheets are healthy with low leverage, enabling them to seek reinvestment opportunities,” she noted.

Taken from iProperty