Home-buying activity may stall next year, primarily attributed to a forecasted slowdown in the global economy and the two rounds of property cooling measures implemented this year.
Despite the bleak economic outlook, home-buying interest remains robust, as witnessed in the long queues at recent property launches. Analysts expect private home sales to moderately decline from 16,300 units in 2010 to between 15,000 and 16,000 in 2011.
However, crowds at property launches are expected to decrease next year, as the weak economic sentiment starts to undermine people’s confidence in the job market. The sales volume for 2012 may dip further to 14,000 units for the entire year.
“If the transaction volumes were to decline and sustained into 2012, then prices are expected to be affected,” said Chua Yang Liang, Head of Research at Jones Lang LaSalle (JLL).
“From our forecast we think possibly between 10 to 15 percent on the downside.”
Analysts do not expect the luxury property market to recover next year, as prices have been predicted to decline by 20 percent, while the mass market home sector remains robust, driven by genuine latent occupier demand and cheaper home loans.
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