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The new rules are likely to push down mass market property prices in the city-state by 3%-5% and moderate volumes this year, Kwek said at a news conference."
DJ UPDATE: City Developments 4Q Net Up 41%; To Raise South Beach Stake
24 Feb 2011 19:45
By Chun Han Wong
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Singapore's second-largest listed property developer City Developments Ltd. (C09.SG) Thursday announced a 41% rise in fourth-quarter net profit and sounded a cautiously upbeat note about its prospects despite government attempts to cool the local property sector.
City Developments Executive Chairman Kwek Leng Beng said he expects the group to remain profitable in 2011, downplaying concerns that Singapore's property market might be severely hurt by the recent cooling measures.
"The government's proactive approach (in managing the property sector) has ensured that Singapore remains highly sought-after as an ideal place for investments, and fluctuations in property transaction volumes are likely to be temporary and are inevitable," Kwek said in a statement.
Singapore's economy grew at a record 14.5% in 2010, but worries of possible asset price bubbles prompted the government in January to take measures such as making individual buyers with outstanding loans on one or more properties stump up more cash, increasing the holding period for the imposition of seller's stamp duty to four years from three years, and raising the rate of duty for homes sold at various stages during this holding period.
The new rules are likely to push down mass market property prices in the city-state by 3%-5% and moderate volumes this year, Kwek said at a news conference.
"This time the measures they've introduced are more effective than before," he said, noting that residential volumes have started falling and an easing of prices may follow. "If there's a temporary slowdown, so be it. We have to accept the fact that the real estate business is cyclical in nature."
The strength of the local property sector in 2010 was reflected in the company's fourth quarter performance.
Net profit for the three months ended Dec. 31 was S$249.2 million, up from S$176.7 million a year earlier due to one-time gains mostly from property divestments. The result beat the average S$217.4 million estimate of five analysts polled by Dow Jones Newswires.
The rise in the group's net profit came mostly from its other operating income, which was $218.5 million--up from S$2.2 million a year earlier--mainly from sales of certain non-core commercial and industrial properties and management fees.
Revenue was S$691 million, down 25.1% from S$922.4 million a year earlier.