CDL’s chief thinks it will take months before property prices begin to recover.
Singapore’s real estate market is still struggling, with home prices falling for the third year in 2016 due mainly to the government’s cooling measures, according to City Developments Limited’s (CDL) Executive Chairman, Kwek Leng Beng.
“I do not believe the worst is over although I think the worst has slowed down,” said the billionaire in an interview with Bloomberg, adding that it may take up to nine months for residential prices to show signs of recovery.
With property curbs remaining in place, home prices declined by three percent last year, with the figure for Q4 2016 sliding for the 13th consecutive quarter, the longest downtrend since the authorities began recording data in 1975.
Nevertheless, Kwek noted that now is a good time to purchase upscale homes as prices have fallen sharply by some 35 percent since 2013.
Meanwhile, CDL’s earnings slumped by 40.6 percent year-on-year to $243.8 million during the fourth quarter of 2016 due to the significant profits recognised in Q4 2015 from CDL’s second Profit Participation Securities (PPS) platform. Nonetheless, revenue for Q4 2016 increased by 36.5 percent to $1.17 billion.
For the whole of 2016, profit dropped by 15.5 percent to $653.2 million, while revenue rose by 18.2 percent to $3.91 billion.
“In view of the challenging economic environment, CDL has delivered creditable results. Notably, Hong Leong City Center Suzhou has made a strong maiden contribution to our record revenue (for FY 2016),” Kwek said.
In addition, the company and its joint venture associates sold 1,017 residential units (including ECs) at a total value of $1.25 billion, making CDL one of Singapore’s top-selling private sector developers last year.
Looking ahead, CDL plans to launch the second phase of Gramercy Park by the first half of 2017, while New Futura will be unveiled in H2 2017.