3 property lessons from the cooling measures over the past 6 years

Developers are reacting strongly.

It has been noted that a scenario where bad news for the physical market may be good news for property stocks has been seen.

According to a research note from Barclays, as the government has always maintained that demand-side cooling measures are counter-cyclical in nature, it would follow that a confirmation of this downtrend could lead to some measures being relaxed.

The report noted that three lessons have been learnt from the introduction of property cooling measures over the past six years.

Here's more from Barclays:

Looking at the reaction of property stocks to the introduction of cooling measures over the past six years, we believe there are three key lessons learnt.
A bigger impact from demand side measures: T+30 day HSP average performance following: Stamp duty increases -3.1%, mortgage tightening - 2.0%, supply side measures +0.1%.

Developers react more strongly to policy changes: T+30 days after the eight demand side measures, developers –3.6% and landlords & REITs +0.6%.

Policy desensitisation: As the market becomes more accustomed to the periodic introduction of new cooling measures, the short-term (i.e. T+1 and T+7) reaction becomes more muted. However, over the long run, increased policy uncertainty leads to widening NAV discounts.