Expect 5-15% drop in home prices by 2015: Barclays

[oops]

On back of higher interest rates.

According to Barclays, it expects prices to fall by an average of 5% in 2014 and by a further 5-15% in 2015 as interest rates rise, and Barclays estimates the vacancy rate could reach an unprecedented 9.9% by 2016.

Here's more:

Secondary transactions declined 51% y/y in 2013 to 7,680 units compared with 15,676 units for 2012, down 70% from the peak of 25,843 units in 2007.

We believe the fine-tuning of the TDSR measures last week should bring some relief to marginal homeowners, but the measures do not change our view that fundamentals are likely to remain weak for the next 2-3 years. We continue to expect developer volumes to fall 20% y/y to 12,000 units in 2014 from 14,980 units in 2013.*

- See more at: http://sbr.com.sg/residential-proper....2lqoHiKI.dpuf

[EBD]

If this happens the 2013 midyear carrotheads who never listen to Khaw's warnings are going to have a miserable few years.

then again, seen these kind of predictions before, but I think the difference this time is the extraordinary amount of cooling measures in place seems to be really biting.

[yowetan]

If this happens the 2013 midyear carrotheads who never listen to Khaw's warnings are going to have a miserable few years.

then again, seen these kind of predictions before, but I think the difference this time is the extraordinary amount of cooling measures in place seems to be really biting.

Hi..I am visiting riverbank/rivertrees to do window shopping, and have a good look at the walking carrotheads.

Again, they may prove to be winner if situation goes favorable for next few years.

[ekl2ekl2]

If this happens the 2013 midyear carrotheads who never listen to Khaw's warnings are going to have a miserable few years.

then again, seen these kind of predictions before, but I think the difference this time is the extraordinary amount of cooling measures in place seems to be really biting.

5-10% very small correction, considered very healthy if it happens.

general market can correct X%, but the individual place/unit one desires may not esp in good/hot location

CMs are within internal control and not external factors or crisis, may lead to pent-up demand later

[indomie]

5-10% very small correction, considered very healthy if it happens.

general market can correct X%, but the individual place/unit one desires may not esp in good/hot location

CMs are within internal control and not external factors or crisis, may lead to pent-up demand later

Very well said, especially the last part.

[princess_morbucks]

5-10% very small correction, considered very healthy if it happens.

general market can correct X%, but the individual place/unit one desires may not esp in good/hot location

CMs are within internal control and not external factors or crisis, may lead to pent-up demand later

Yes, spoken like an expert!

[Ringo33]

Correction is always healthy because it will generate buying interest and set the market on course to achieve the next high.

Personally I am not so concern about 10 or 15%, its more of how long this decline will last before the bull comes back again.

Knowing Singapore, I think any crash will be very short live. And if you are seriously in the market for property now, better start shopping before you missed the boat again.

[walkthetiger]

Correction is always healthy because it will generate buying interest and set the market on course to achieve the next high.

Personally I am not so concern about 10 or 15%, its more of how long this decline will last before the bull comes back again.

Knowing Singapore, I think any crash will be very short live. And if you are seriously in the market for property now, better start shopping before you missed the boat again.

Believe Mr KBW. The market will not crash....but will remain miserable for years....

[Ringo33]

Believe Mr KBW. The market will not crash....but will remain miserable for years....

Thats perhaps the worst nightmare of the industry.

[wt_know]

so man experts, gurus and analysts expects and predicts drop drop drop with their super tok kong crystal ball ... where is the drop

as far as i see, $psf is still very high from $950-$1000psf for OCR which is 40% jump (at least) compare to 3 years ago

[teddybear]

Only the CCR never goes up at $2xxx psf, OCR all run up like mad!
That about $1000 psf for OCR is not comparable to older launches because now they come with porecelain tiles (the cheapest tiles they can get), laminates for bedrooms (cheapest form of flooring for bedrooms they can get), and many other costs are cut + 20% useless space that sold to you! If they provide same old materials and quality and usable space, OCR condos will need to sell at $1400-1500 psf, all these courtesy of ABSD where foreigners flocking to buy OCR condos to save on ABSD!

so man experts, gurus and analysts expects and predicts drop drop drop with their super tok kong crystal ball ... where is the drop

as far as i see, $psf is still very high from $950-$1000psf for OCR which is 40% jump (at least) compare to 3 years ago

[4wheels]

so man experts, gurus and analysts expects and predicts drop drop drop with their super tok kong crystal ball ... where is the drop

as far as i see, $psf is still very high from $950-$1000psf for OCR which is 40% jump (at least) compare to 3 years ago

Agree totally. Around 800psf for OCR condo is about right.

[teddybear]

That is about right if developers don't provide built-in cabinets, air-cons, flooring, furnishing, and appliances (just like BTO flats)!

Agree totally. Around 800psf for OCR condo is about right.

[relax88]

if you have a steady job/ business and has no money emergency.

would you sell your unit?

let me give you an example, try going to sg rolex and offer any of the sellers, selling a 2014 solid gold rolex but at 1990s pricing. see how they fuc k you up

I saw some D9 properties at low prices but these units, you wont like to stay in them

[snoopy]

Agree totally. Around 800psf for OCR condo is about right.

When ECs already hitting 750-800psf, it maybe difficult for OCR private condo to go down to 800psf.

[Ringo33]

Agree totally. Around 800psf for OCR condo is about right.

If you want to talk about PSF, please also include unit size please. else its misleading and meaningless.

[CCR]

The best glimpse of the future is to look at past trends....

1. Consecutive crisis after crisis= 5 - 7 years in the doldrums.... Asian financial crisis followed by dot com burst, 911 and lastly sars = 50% drop.... sars is the worst coz the world population might be wiped out that's why the last keg is worst

2. Single global Crisis! GLOBAL Ah! = 1 year in the doldrums = 25% drop

3. Cooling measures only and slowly increasing interest rates = max 1-2 years drop = 10% Drop. In 2006 2007, interest rates go up every quarter, did prices Drop? No! It was Lehman Brothers that cause prices to plunge.

Prices started dropping Qi 2013. Max 1 years 9 months to go before prices pick up again....

For those who missed the boat please start looking now and buy in the next 1 year if price and unit is right for you....

[wt_know]

the current OCR 2B (750-850sqft) and 3B (900-1000sqft) is priced at $900k-$1.05M ... this is so called cheap units liao

is this considered drop already?

[DC33_2008]

In addition with more positive news from US market and consumption that helps to move Singapore market too.

The best glimpse of the future is to look at past trends....

1. Consecutive crisis after crisis= 5 - 7 years in the doldrums.... Asian financial crisis followed by dot com burst, 911 and lastly sars = 50% drop.... sars is the worst coz the world population might be wiped out that's why the last keg is worst

2. Single global Crisis! GLOBAL Ah! = 1 year in the doldrums = 25% drop

3. Cooling measures only and slowly increasing interest rates = max 1-2 years drop = 10% Drop. In 2006 2007, interest rates go up every quarter, did prices Drop? No! It was Lehman Brothers that cause prices to plunge.

Prices started dropping Qi 2013. Max 1 years 9 months to go before prices pick up again....

For those who missed the boat please start looking now and buy in the next 1 year if price and unit is right for you....

[Mu]

I feel the market will remain flat...

Why should anybody sell their property for a lower price, when they are getting positive rental yield?? Most will just hold..

Only developers will try to be creative by offering smaller units at ulu -er locations...Even they cant play around too much, having bid a high price for the land plus faced with a shortage of workers and higher operating cost....

So how can prices go down??

Prices will only go down in the following scenarios

1) Ppl lose jobs
2) Foreigners leave (no rental income)
3) Global market crash...

All three above are unlikely in the next 3 years...

[Ringo33]

There will always be owners who are struggling to find tenant for their property and eventually when they get worried and sell even if they make losses.

When buying investment property for rental, always go for good unit, good layout, good facing because good property will attract good tenant and it will become even more important when there is an over supply in the market.

[Mu]

Yes, but you pay for what you get...

Good layout, good location, good everything= high price tag

There's no free lunch...

[玉格格]

If this happens the 2013 midyear carrotheads who never listen to Khaw's warnings are going to have a miserable few years.

whether will be miserable onot oso nid to depends on which project one buy mah ....

[walkthetiger]

I feel the market will remain flat...

Why should anybody sell their property for a lower price, when they are getting positive rental yield?? Most will just hold..

Only developers will try to be creative by offering smaller units at ulu -er locations...Even they cant play around too much, having bid a high price for the land plus faced with a shortage of workers and higher operating cost....

So how can prices go down??

Prices will only go down in the following scenarios

1) Ppl lose jobs
2) Foreigners leave (no rental income)
3) Global market crash...

All three above are unlikely in the next 3 years...

Essential positive thinking for people who choose to keep holding.

But, the usually herd's worry "If I choose to hold, what if the rest doesn't follow, then will it left me with just some fellows holding onto something(doesn't appreciate or may even depreciate) for years?" is always there.

[Mu]

Singapore property is unique.

There's clearly huge demand for rental by foreigners especially in the mass market sector. Even if the rent is slightly lowered, there will be hoards of rent -hungry foreigners knocking at your door. I truly believe that as long as the foreigner surplus is maintained, renting out mass market properties should not be an issue. This in turn means owners are able to cover their mortgage.

Of course if there is a policy change on foreign PMETs into Singapore, then you can say goodbye to the holding power of owners, and the panic sale will start.

[walkthetiger]

Singapore property is unique.

There's clearly huge demand for rental by foreigners especially in the mass market sector. Even if the rent is slightly lowered, there will be hoards of rent -hungry foreigners knocking at your door. I truly believe that as long as the foreigner surplus is maintained, renting out mass market properties should not be an issue. This in turn means owners are able to cover their mortgage.

Of course if there is a policy change on foreign PMETs into Singapore, then you can say goodbye to the holding power of owners, and the panic sale will start.

Also factor in the coming huge supply of new houses, and so the competition of tenants.

[Werther]

Was looking at classified paper today, Beverly Hills used to ask for $9m few months back, today someone advertised for $6.2m... Dropped quite significant...What happened? If I have the money, I would definitely consider ..haha.

[Ringo33]

Singapore property is unique.

There's clearly huge demand for rental by foreigners especially in the mass market sector. Even if the rent is slightly lowered, there will be hoards of rent -hungry foreigners knocking at your door. I truly believe that as long as the foreigner surplus is maintained, renting out mass market properties should not be an issue. This in turn means owners are able to cover their mortgage.

Of course if there is a policy change on foreign PMETs into Singapore, then you can say goodbye to the holding power of owners, and the panic sale will start.

Singaporeans are unique, all want to retire as a landlord.

[triproton]

Singapore property is unique.

There's clearly huge demand for rental by foreigners especially in the mass market sector. Even if the rent is slightly lowered, there will be hoards of rent -hungry foreigners knocking at your door. I truly believe that as long as the foreigner surplus is maintained, renting out mass market properties should not be an issue. This in turn means owners are able to cover their mortgage.

Of course if there is a policy change on foreign PMETs into Singapore, then you can say goodbye to the holding power of owners, and the panic sale will start.

Hasn't there already been a change? Even high income PMETS (way above $12k) are having their EPs rejected..

[thomastansb]

I think that is the wrong approach. You forget the most important factor - purchased price and rental.

When buying for rental, you only need calculation. If you are buying a studio, look around and see how much is a similar sized studio is worth.

Let's say if I buy Altez studio and Icon studio average 3.8k rental, then I would probably expect similar rental. Then I work out the bank installment + misc fees and see if I am comfortable enough with the amount. I will also factor in a 30% drop in rental and a 3.5% interest on a worst case scenario.

Your layout how good, also no use. The rental will be similar to nearby projects.

There will always be owners who are struggling to find tenant for their property and eventually when they get worried and sell even if they make losses.

When buying investment property for rental, always go for good unit, good layout, good facing because good property will attract good tenant and it will become even more important when there is an over supply in the market.