One industry expert is predicting a 10 percent across-the-board decline for residential property prices in Singapore this year.
Carmen Lee, Head of Research at OCBC Investment Research, said the mass market segment will likely be hardest hit, with prices dropping by up to 15 percent.
She said: “We see a bit more vulnerability from the mass market segment this year, partly because we believe that the high-end has already corrected more in 2013, hence it could see a slower rate of decline this year.”
Singapore’s property market is faced with a triple whammy of sizeable new supply coming onstream, property cooling measures that continue to bite and looming higher interest rates after the United States Federal Reserve started its tapering exercise.
The research house said it believes that around 50,000 (2014), 49,700 (2015) and 73,600 (2016) houses, including executive condominiums and HDB flats, will come onto the market during the next three years.
There will also be demand for around 29,000 houses per year, based on a population of six million by 2020 as well as an average population growth of 86,000 people per year from 2014 until 2020.
Those figures, she noted, are way below the projected number of new houses.
Over the next two quarters, the property sector will be affected by these factors, bringing the property stocks on the Straits Times Index under selling pressure.This year Singapore property stocks are expected to correct by a further 10 percent.
Lee said valuations could become compelling when that happens.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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