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28-01-14, 09:27
RESIDENTIAL property prices in Singapore could fall up to 10 per cent across the board this year, an industry expert said.
Mass market homes could be the hardest hit, with price dives of up to 15 per cent, said Ms Carmen Lee, research head of OCBC Investment Research.
"We see a bit more vulnerability from the mass market segment this year, partly because we believe that the high-end (sector) already corrected more in 2013, hence it could see a slower rate of decline this year," said Ms Lee at an OCBC press briefing yesterday on the outlook for Singapore.
The property sector here is facing a triple whammy: property cooling measures that continue to bite, sizeable new supply coming onstream and looming higher interest rates following the start of the United States Federal Reserve's tapering exercise.
OCBC Investment Research anticipates that some 50,000, 49,700 and 73,600 homes including HDB flats and executive condominiums will come onstream in the financial years 2014, 2015 and 2016 respectively.
OCBC believes there will be demand for about 29,000 homes a year, working on a population of six million by 2020 and average population growth of 86,000 a year from 2014 to 2020.
This figure is far lower than the projected number of new homes.
These factors are likely to bog down the property sector for the next two quarters of this year and for that reason, property stocks on the local bourse could continue to come under selling pressure.
Ms Lee expects property stocks to correct by a further 10 per cent this year. By then their valuations could turn compelling, she said.
The headwinds facing property companies could also be partly dampening investor sentiment in the local bourse which has had a weak and bumpy start to the year. The Straits Times Index (STI) has lost 4 per cent over four trading weeks so far this year.
"As a percentage of the STI, (the weighting) of property stocks is very small as the index is anchored by banks and telcos but as a percentage of sentiment, it's a lot more," said Ms Lee.
Overall, she expects decent corporate earnings growth of some 8 to 10 per cent this year, which indicates some cautious optimism for the market in 2014.
OCBC Bank's head of treasury research and strategy, Ms Selena Ling, expects Singapore to chart slow but steady growth of about 3 to 4 per cent of gross domestic product growth this year.
She expects two familiar themes from the Feb 21 Budget - restructuring on the economic front and working to ensure an inclusive society.
Ms Ling does not expect corporate income tax to be raised but does not rule out possible tweaks in "wealth" taxes.
As for the goods and services tax, she shares the views of many others who expect it to be raised some time in the next five years or so.
Mass market homes could be the hardest hit, with price dives of up to 15 per cent, said Ms Carmen Lee, research head of OCBC Investment Research.
"We see a bit more vulnerability from the mass market segment this year, partly because we believe that the high-end (sector) already corrected more in 2013, hence it could see a slower rate of decline this year," said Ms Lee at an OCBC press briefing yesterday on the outlook for Singapore.
The property sector here is facing a triple whammy: property cooling measures that continue to bite, sizeable new supply coming onstream and looming higher interest rates following the start of the United States Federal Reserve's tapering exercise.
OCBC Investment Research anticipates that some 50,000, 49,700 and 73,600 homes including HDB flats and executive condominiums will come onstream in the financial years 2014, 2015 and 2016 respectively.
OCBC believes there will be demand for about 29,000 homes a year, working on a population of six million by 2020 and average population growth of 86,000 a year from 2014 to 2020.
This figure is far lower than the projected number of new homes.
These factors are likely to bog down the property sector for the next two quarters of this year and for that reason, property stocks on the local bourse could continue to come under selling pressure.
Ms Lee expects property stocks to correct by a further 10 per cent this year. By then their valuations could turn compelling, she said.
The headwinds facing property companies could also be partly dampening investor sentiment in the local bourse which has had a weak and bumpy start to the year. The Straits Times Index (STI) has lost 4 per cent over four trading weeks so far this year.
"As a percentage of the STI, (the weighting) of property stocks is very small as the index is anchored by banks and telcos but as a percentage of sentiment, it's a lot more," said Ms Lee.
Overall, she expects decent corporate earnings growth of some 8 to 10 per cent this year, which indicates some cautious optimism for the market in 2014.
OCBC Bank's head of treasury research and strategy, Ms Selena Ling, expects Singapore to chart slow but steady growth of about 3 to 4 per cent of gross domestic product growth this year.
She expects two familiar themes from the Feb 21 Budget - restructuring on the economic front and working to ensure an inclusive society.
Ms Ling does not expect corporate income tax to be raised but does not rule out possible tweaks in "wealth" taxes.
As for the goods and services tax, she shares the views of many others who expect it to be raised some time in the next five years or so.