The government’s move in July to begun implementing new rounds of curbs on the property market has its fair share of supporters and naysayers.
What are the prospects of the market in the months ahead?
Are cooling measures ‘overdone’?
Some analysts are in the opinion that the property market will rebound next year, with prices quite possibly rising sharply. This camp considers the concerns over the property market’s rapid pace of recovery too much too soon.
Investment bank Morgan Stanley has, in fact, predicted a 2% each quarter for private home prices until the end of 2019. This estimation sounds hopeful and perhaps even bullish in light of the recent market reaction to the curbs.
They are noting healthy demand from HDB upgraders and displaced homeowners who are cash-rich from collective sales.
While this may not be untrue, and the unsold inventory has dropped to a historical low of 28,000 units, will the buying continue well into the next year or when more completed units enter the market?
The rise in private home prices dropped in Q3
Most of the other predictions have not been as upbeat. In the other camp, analysts predict at best a flat market outlook next year, with the possibility of a slight decline in sales figures.
They are looking at the softer demand from buyers following July’s property cooling measures and predict a price-rise of 8% to 9% this year and 2% next year.
The upcoming supply in the launch pipeline is also causing for concern as it would increase competition significantly, especially if the demand from potential buyers dip as most would have made their purchases or investments this year.
While the steep decline is unlikely, 2019 may see more launches from new projects developed from recent collective sales which could in turn ramp up the supply chain. It may tilt towards being a buyers’ market and a competitive one at that. This could mean that developers are less likely to be able to price aggressively.
Some analysts have a more middle-ground prediction of a flat growth in the first half of 2019 and a slow recovery in the second.