Singapore Budget 2014 disappoints property developers with lack of unwinding

See when a rollback could occur.

The Singapore budget for 2014 did not relax the prevailing property curbs, much to the dismay of property developers.

"The government recognizes that it is not able to eliminate cycles in the property market, signaling it will allow the market to correct by a certain level," said Barclays Research on why the government decided not to unwind the property tightening measures.

"We expect a rollback only when prices correct 10-15% vs just -0.9% in 4Q13, and even with a rollback then we expect the weak fundamentals to prevail. Hence, we continue to stay negative on developers, and see a recovery in the physical market only after end-2015," it added.

Given this development, Barclays Research gave Underweight investment ratings on City Developments and Keppel Land, who will likely be most affected.