Singapore’s property stocks have been anything but exciting in the last 3 years. Many Singaporean stocks are trading for less than half of their price. Though this may seem disappointing, takeover firms could be making it big in the market soon. Investors are flocking to such investments, which include property stocks as well. Home prices in Singapore are expected to rebound soon, which will help in driving the value of these stocks significantly. The government is looking to push the slow growth in economy and the direct effects of such a stimulus will be visible in home prices, making property stocks soar soon. The biggest beneficiaries of the push would be OUE Ltd, UOL Group Ltd., CapitaLand Ltd., and City Developments Ltd.
Stocks as viable investments
In a slowing economy, people look for more liquid options. Which can help the investors gain a significant upturn on their principal in the medium and long term. However, physical property is a riskier investment. The good news is that the government drives the policies related to home prices and they have decided to leash the beast by controlling the home prices which are the most expensive in Asia. In fact, the fourth-quarter results have shown the biggest ever slump in home prices, in nearly 7 years, when they dropped by 0.5 percent Since 2013, the prices are down by 11 percent while sales have halved.
In such a case, investors may be in a fix to buy properties as these demand lump sums. Even though they are quite lucrative options in the long run. Property stocks solve this problem. In the year 2016, the equal-weighted index of the big three property developers in Singapore, namely UOL Group, CapitaLand, and City Developments, fell by 3.6. This index has now outperformed the Straits Times Index, year-over-year. The risk-rewards run high, which creates potential for future growth.
Developers moved higher
Developer stocks have individually moved higher owing to an expectation that norms will be eased. Interest from foreign buyers certainly raised the home prices which were evaded by increasing stamp duties etc. The housing market is still on fire as developers sold 9% extra units in 2016. As 13,000 more units will be deliver this year, the developers will be in a better position to cash on their hard work. Land will be bought for investment purposes and housing units will see a similar trend. As a result of this, the stocks of the property markets are going to soar even if the government does not ease lending.
Investors should buy property stocks right now as they have shown rise in 2017 after a great 2016 sale figure. Invest in these stocks now to gain significant profits in the future.
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