Analysts differ on whether prices will fall

[reporter2]

http://www.straitstimes.com/archive/...-fall-20130113

Analysts differ on whether prices will fall

Published on Jan 13, 2013


Private property prices could fall as much as 5 per cent by June, a property consultant said yesterday, though other analysts were less negative.

The Government announced its seventh and most comprehensive round of cooling measures so far on Friday evening.

These will not affect Singaporeans buying their first homes but investors will feel the pinch.

"The hefty ABSD... will have a drastic impact," said PropNex chief executive Mohamed Ismail yesterday.

Additional buyer's stamp duty (ABSD) - first introduced in December 2011 - was raised by 5 to 7 percentage points across the board.

Mr Ismail expects sales volume to drop by more than half, and private property prices to slide 5 per cent within the next six months.

Apart from the new measures, a bumper crop of residential supply coming onto the market could also drive down home prices.

Minister for National Development Khaw Boon Wan said on Friday that as many as 200,000 residential units are under construction.

Half of those are HDB flats and the rest are private condos. They are expected to be completed within the next two to four years.

"For the moment, there is a temporary shortage and that's why some buyers panic," Mr Khaw said.

He added: "My assurance to Singaporeans: Please don't worry. We have enough homes... There will be enough homes for everybody even though the population is increasing somewhat."

DWG analyst Lee Sze Teck expected price rises to be minimal: "As with all policy changes, there will be an initial knee-jerk reaction as investors reassess their options. Transaction volume in 2013 is likely to be lower than last year and price growth is likely to be flat."

A Goldman Sachs report said that home sale volumes could fall 30 per cent quarter on quarter although the bank expects price levels could still be supported as interest rates are still low.

Savills research head Alan Cheong had the most bullish outlook on property prices, even expecting them to rise this year as developers have paid high prices for recent land tenders.

He thinks high-end condo prices could still rise between 3 per cent and 5 per cent, and mass market condo prices could shoot up as much as 15 per cent.

"People still wanted to sign contracts at the eleventh hour on Friday. If they thought prices would drop more than 7 per cent, why rush to sign? They would instead have forfeited their options," Mr Cheong said.

Melissa Tan

[RCT]

Actually I don't understand the point that developer have pay high price for the land and cannot sell lower... The point is if no one want to buy at high price, who you can do? Hold the land and suck thumb....

[phantom_opera]

the HDB upgraders from 2003-2006 era are sitting on huge paper gain and very chiongsters style ... that's why this CM is so harsh

[Tony Blair]

All depends on which side you stand.
Those who wait to buy hope prices to fall.
Those looking to sell hope prices dont fall.
If u have moolah just buy.

[rockinsg]

Actually I don't understand the point that developer have pay high price for the land and cannot sell lower... The point is if no one want to buy at high price, who you can do? Hold the land and suck thumb....

during recent years developers have created huge reserves.
What they will do is hold the prices and build more land bank on lower prices and hope all the CM get lifted in few years when economy catches up with prices.
Losers will always be buyers. Its not a winning game for us.