Singapore developers to get sales boost from China’s interest rate cuts

Three firms are poised to benefit.

Singapore developers are poised to benefit from the People’s Bank of China’s (PBOC) unexpected interest rate cuts. PBOC slashed its benchmark lending rate by 40 base points last Friday, in response to a sharp slowdown in China’s growth.

DBS notes that lowering interest rates should boost housing affordability and buyer sentiment, which will have a positive effect on Singapore developers with significant exposure in the Chinese residential sector.

Keppel Land has the largest exposure to the Mainland’s residential market, with around 35% of its assets made up of residential projects in China. CapitaLand has the second-largest exposure with around 13%, while Frasers Centrepoint comes in third with a 6% exposure to the Chinese residential market.

“As discussed by our DBS China property team, this interest rate cut could be a potential inflection point to help sustain the recovery in sales seen in the latest October statistics,” stated DBS.