This year, the rate of decline for private home prices is expected to exceed that of 2014. Last year’s drop was estimated at 4 per cent whereas this year, industry analysts project an 8 per cent drop. This new estimate for the private property sector will put it on par with resale HDB flats. In 2014, the public housing market reflected a 6 per cent drop in prices.
Some market factors from last year are here to stay:
1) Tightened credit market
2) Stricter immigration policies
3) Weakening demand
4) Increasing supply of new homes
5) Higher stamp duties
And while interest rates were at a low at a point in time last year, they are expected to rise this year, which makes for an even less favourable environment for a thriving buy-and-sell of residential properties in particular.
This may put a fair bit of pressure on home sellers, who may find themselves having to lower prices in order to make a sale. With developers competing for the same buyers with offers of discounts, rebates and other enticing options, resale private properties might struggle to stand out.
Landlords may also find that it’s a tenants market as an onslaught of homes become ready for occupation this year. The most recent residential projects to come into the market this year include the 622-unit The Luxurie and 590-unit The Riversound Residences in Sengkang.
Coupled with a number of new launches planned for this year, and fewer foreign buyers taking the bite, the only properties which may remain popular are mass-market homes in locations close to MRT stations, schools and shopping malls.