Investors ditch developer stocks for REITS

Property stocks fell 5.4% whilst REITS rose 0.7% since the cooling measures in July.

More analysts in Singapore have been rooting to Real Estate Investment Trusts (REITs) than developer stocks amidst the property cooling measures imposed back in July, Bloomberg reported.

“There’s been a lack of interest in developer stocks post the cooling measures and some of that capital has moved out to other sectors,” RHB analyst Vijay Natarajan said in a phone interview. “The market had not expected the severity of the measures announced.”

Developer stocks were seeing its boom for the most of 2017 until H1 2018 which can be seen through the rising home prices and climbing sales. However, the property curbs have shocked the industry immediately the midnight after its announcement.

Since then, property stocks fell 5.4% whilst REITs are inching up 0.7% during the same period. With this, Jefferies Singapore analyst thinks that developers may trim down their asking prices by 10% due to the property curbs.

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