SINGAPORE - Immigration is the "wild card" in Singapore's housing demand equation, according to analysts at Credit Suisse.
Singapore's low birth rate and market expectations of slow immigration growth have raised questions as to whether property prices are at risk of falling amid a record housing supply pipeline, said Credit Suisse in a research note this week.
"In our view, prices are likely to stay flattish as the Government attempts to balance between keeping housing affordable and not allowing prices to crash," it said, noting high property-ownership among Singaporeans.
"If immigration moderates to the 75,000 per annum levels, we estimate that private occupancy could be 90 per cent in 2015, which we view to be fairly absorbable by the market and unlikely to cause prices to crash."
Credit Suisse tips CapitaLand as its top pick, expecting earnings momentum to improve next year, driven by CapitaMalls Asia, with downside supported by buybacks. It also likes City Developments for its strong execution.
CapitaLand shares jumped 3.5 per cent to close at S$3.29 each yesterday, while City Developments shares rose 2 per cent to S$11.93 apiece.
The shares of the developers have surged about 49 per cent and 34 per cent, respectively, in the year to date, outperforming the 18-per-cent rise in the benchmark Straits Times Index.
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