Property now "underweight"

JP Morgan have given an "underweight" rating on Singapore property stocks. In other words, it's not recommended to invest more into Singapore property stocks.

According to the Business Times, a JP Morgan report says that the short-term private housing supply crunch should "normalise" in 1 to 2 years' time. More units will be completed in 2009 and post-2010. But in the meantime, people will have to bear with the current crunch.

I take this to mean that property prices may plateau soon and may even crash if things go wrong - it would be a double whammy if, say in 2009, the economy suddenly turns bad and at the same time the supply of private housing units continues to increase.

But JP Morgan is still maintaining its "overweight" rating on Capitaland and Guocoland, perhaps due to good fundamentals?

http://www.salary.sg/2007/property-now-underweight/