Shares in Singapore developers such as CapitaLand Ltd fell after persistently strong property data added to worries that the government may introduce more measures to cool the housing market.
CapitaLand, Southeast Asia's largest property developer, lost as much as 2.2 percent at S$2.63, while smaller rival City Developments dropped 2.1 percent to S$10.04.
New private home sales in Singapore stayed strong for the fourth consecutive month, rising nearly four percent in April from March, data from the Urban Redevelopment Authority (URA) showed.
"Demand stays unabated even as the government continues to flood the system with supply, most recently releasing five sites yielding 2,100 units," said CIMB Research in a report.
The broker noted that April's new private home sales of 2,487 units was the highest since July 2009. It is underweight residential developers and has an underperform rating on CityDev but an outperform on CapitaLand.
"We believe the strong volumes and increasingly speculative trend, in our opinion, will not sit well with policy makers," said CIMB.
Another broker Maybank Kim Eng said while the secondary market and the high-end segment in the primary market remain subdued, exuberance persists in the mass market.
It believes policy risks are still elevated and expects property prices to correct by 10 percent by the end of 2013.
Kim Eng advised investors to avoid Singapore-focused residential developers and said its top picks are retail property stocks such as CapitaMall Trust and CapitaMalls Asia, followed by diversifed companies including CapitaLand and Keppel Land.
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1044 (0244 GMT)
(Reporting by Charmian Kok in Singapore; firstname.lastname@example.org)