June 14, 2008

Home prices in mid to low tier expected to stay stable: CapitaLand

PROPERTY giant CapitaLand expects prices of mid- to low-tier homes to remain largely stable this year despite signs of a weaker market.

Chief executive Liew Mun Leong reportedly said in Beijing on Thursday that demand for homes in Singapore is still holding up well.

Prices of lower-end homes will be 'marginally up or down', Mr Liew said in an interview at a press conference, Bloomberg reported.

He also noted prices of mid-market and lower-end homes, usually bought by HDB flat upgraders, have risen 3 per cent to 5 per cent this year.

His comments come against the backdrop of a much quieter property market, with many buyers keeping to the sidelines.

Industry sources say demand exists but only at lower price tiers. Home prices, particularly those for high-end projects, shot up to unrealistic levels during the property boom last year, they say.

The market turned silent this year, which has led some analysts to project that home prices will fall by as much as 40 per cent over the next two years.

Last month, CapitaLand reiterated its target of launching 800 to 1,000 units this year. Among those lined up for launch are Latitude in River Valley and the project on the Silver Tower site in Orchard. Projects in the pipeline include those on the Char Yong Gardens, Farrer Court and Nassim Hill sites.

CapitaLand also bought the huge Gillman Heights site. But the objecting owners are trying to overturn the sale and the High Court judge has yet to decide on the case.

On Thursday in Beijing, Mr Liew was also quoted as saying that the group is looking for distressed assets in Japan and China to aid its expansion in the two markets. CapitaLand is seeking such assets at a time when rising energy and commodity prices as well as a slowing global economy are putting additional financial stress on firms and stoking defaults worldwide.