Correction in S’pore’s property market

Correction in S’pore’s property market

Property developer Wing Tai foresees a growing possibility of a correction in Singapore’s property market. This as the firm announced its fourth quarter (Q4) earnings on Tuesday.

Wing Tai’s Q4 net profit slipped 16 per cent to S$140.5 million. This is despite its revenue jumping 88 per cent to S$202.2 million.

The company said its lower Q4 profit was due to a change in accounting standards, which do not recognise profits from uncompleted units.

Full-year profit declined 35 per cent year-on-year to S$242.2 million, while turnover dropped 17 per cent to S$624.9 million. A total dividend of seven cents per share was also declared.

At the results briefing, Wing Tai said it is targetting to launch its latest freehold residential development with 337 residential units with one commercial unit next year.

Formerly zoned for industrial use, the developer has successfully applied to change the use of its former headquarters to residential.

Located at Tampines Road near Kovan MRT station, Wing Tai said this latest project which sits on land acquired in the 1960s would help capture any potential uptick in the property market.

But the property developer believes the market is set for a correction ahead.

Chairman of Wing Tai Holdings, Cheng Wai Keung, said: “A number of you have been asking why have we not been tendering for URA projects and we have not been active in the market for quite some time.

“I would still maintain that the correction will be coming and the way I look at it, is that if there is a cycle, if you take away that 2008 temporary drop, you smooth out the curve, it is actually the eighth or ninth year of the rise in this cycle.”

Source : Channel NewsAsia – 21 Aug 2012