Will rising home prices raise the risk of fresh cooling measures?

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The Business Times – 

WITH the private residential market poised to end the year on a high note, does this once more heighten the risk of policy measures?

Even the perceived possibility of cooling measures could serve as a near-term headwind for the share price of property developers with exposure to the private residential market, one analyst has flagged.

Earlier this month, the 696-unit CanningHill Piers saw brisk sales over its launch weekend, with 77 per cent – or 538 units – scooped up by buyers at an average selling price of about S$3,000 per square foot (psf), raking in total sales of some S$1.18 billion.

Among the units sold was the project’s only super penthouse, an 8,956 square foot apartment on the 48th floor, which transacted for S$48 million or S$5,360 psf. The 99-year leasehold project, part of an integrated development located at the site of the former Liang Court, is being jointly developed by City Developments Limited (CDL) and CapitaLand Development.

In a research note, Citi analyst Brandon Lee highlighted that while CDL has underperformed developers, share price upside is likely to be contained by residential policy risk and the patchy recovery in the hospitality sector.

CanningHill Piers’ pricing, along with two upcoming high-end launches in this quarter, is seen as a catalyst for possibly pushing the Q4 2021 price index upwards. Luxury launches include the freehold 39-unit Cairnhill 16 (the former Cairnhill Heights) in District 9 and the freehold 230-unit project Perfect 10 along Bukit Timah Road in District 10.

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