While July’s property cooling measures have affected the authorities’ motivation behind the implementation, industry analysts say a sharp and sudden price-decline is unlikely.
Price decline may occur but fall will be slight
The growth of property prices have dipped from 3.4% in Q2 to only 0.5% from July to mid-September.
While it was not entirely a crash landing for the market which had just started to take off earlier this year; the magnitude and pace of growth have declined.
Some districts have fared better than others, in particular, properties in the prime district. A slight growth can be seen here with private apartment prices up 1.2% in Q3 compared to a 0.9% rise in Q2.
This, however, could be buoyed by some newer properties such as 8 St Thomas and Wallich Residences. The former for example sold 20 units at a median of $3,531 psf.
High land prices could mean developers will hold on to prices
Overall, perhaps developers were less inclined to launch units priced above the market average after the curbs. The Tre Ver for example sold at $1,553 psf, a price lower than the expected.
The Verandah Residences, Margaret Ville and Amber 45 all launched at lower prices in Q3 in comparison to their launch prices in Q2. Some projects might have also been clearing inventory at discounted prices.
In the months ahead, prices can be expected to stabilise as developers hold on to prices due to the high prices they have previously acquired the sites for.
Instead of a sudden about-turn, prices are still expected to increase, but at a much more sustainable rate, which was the government’s intention. Not to halt but to hold back.