Housing prices in Singapore could fall 10 to 15 percent in the next 12 months, according to a report by UBS.
UBS claimed that while the property market remains resilient despite the government’s cooling measures, it is near a tipping point. However, this outlook is significantly more pessimistic than other expert predictions which expect stable prices or a lesser decline of up to five percent.
While the bank acknowledged that low interest rates and tight supply of housing are keeping prices resilient, it noted that other factors point to more cautious prospects in the coming months.
For instance, the city-state’s still recovering economic growth is now more uncertain. At the same time, the government’s cooling measures is continuing to discourage market activity.
For 1H2012, the proportion of homes bought by foreigners and companies dropped to seven percent from 20 percent last year. Additionally, the population growth rate has declined further due to tighter immigration policies.
Overall, these negative factors have soured the bank’s outlook on the property market, leading to its forecast of a “moderate” 10 to 15 percent price correction.
However, Ong Teck Hui, Executive Director at Credo Real Estate, disagrees with the UBS forecast.
Barring any major global events, he believes prices will move up or down marginally, just like in previous quarters.
“For prices to correct 10 to 15 percent, they will have to fall about 2.5 to four percent every quarter from now. This means that something serious has to happen and we should be experiencing some softening but we haven’t seen that,” he added.
Source : PropertyGuru – 26 Jul 2012
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