The first quarter of 2015 has proved to be a slow one for the property industry. But the slowdown has lost some speed. Compared to the previous quarters, the decline for both private and public housing was at around 1 per cent for the past three months.
Property prices and sales have been slowing down since mid-2013. In the resale HDB flat market, prices have fallen for 7 consecutive quarters and private property prices have fallen 6 quarters in a row. What will the rest of the year hold for these market segments?
For the private property sector, property analysts are predicting:
- A further dip in prices as the number of unsold units are on the rise.
- Continued fall in rental prices as more completed new homes enter the fold. The decline in the first quarter of the year was 1.7 per cent; rental prices fell 1 per cent in the last quarter of 2014.
- As interest rates rise, home owners and developers may be pushed to lower prices further to secure deals. The competition between resale and new properties may also heat up.
- A 5 to 8 per cent fall in private home prices for the year as buyers delay their market entry, possibly waiting for prices to fall further before making a buy.
In the HDB resale flat market, the prospects seem slightly more positive:
- HDB resale prices are expected to fall at a slower pace of 4 to 7 per cent and perhaps even stabilise.
- But as more new BTO (build-to-order) flats and ECs (executive condominiums) are completed this year, flat owners may feel the imminent pressure to sell their existing flats at lower prices in order to move into their new units.
A fall in home prices seem inevitable this year, but the good news may come in the form of increasing sales and reaching a balance between sellers and buyers in terms of home prices.