Private property prices to fall up to 12% over next 3 months: Analysts

Private residential property prices are expected to fall as much as 12 per cent over the next three months. This is according to analysts who also expect demand for private homes to decline as well over the next few months.

Analysts say the recent move by the Government to introduce additional buyer’s stamp duty (ABSD) as a further cooling measure may dampen demand from potential upgraders who make up the bulk of private property buyers here

The decline in sales and prices are also expected to affect mass market private homes more this time round as the luxury segment has already been hit when the latest property cooling measures were introduced late last year.

The additional stamp duties hinder upgraders which form up the majority number of the mass market purchasers. Correction in prices is expected to hover around 8 per cent to 12 per cent for the next two to three months.

Even last month’s spike in private home sales could not bolster analysts’ sentiment on the property sector. They reckon that the rise in sales will unlikely be sustainable because it was not broad-based and, instead, most of the sales came mainly from only a few projects.

The four new launches are the Watertown, The Hillier, Parc Rosewood and executive condominium The Rainforest.

The four projects sold 770 units, 387 units, 198 units and 172 units respectively. Combined, they made up 73.5 per cent of the 2,077 total units sold in January. Excluding these four new launches, sales volume would be a mere 550 units, close to the 670 units sold in December 2011, which was the lowest for the year of 2011.

Meanwhile, analysts say attractive offers from developers contributed to the increased sales in new projects last month.

Developers are giving perks, rebates and renovation vouchers in return to cushion off the ABSD. Hence, the impact may not be felt greatly by the purchasers.

The sale of luxury condominiums continued its downtrend with units sold in the core central region posting a 51-per-cent decline on-month in January.

The prime market has been slow with only 10 per cent share of primary market sales. Demand in the prime market is expected to weaken further due to the ABSD, as a quarter of demand in prime comes from foreigners.

On a brighter note, analysts expect sales of local properties for investment purposes will continue to remain healthy.

This is due to Singapore’s relatively lower property prices as compared to Hong Kong or bigger cities in China.

Some analysts pointed out that foreign investors may also move into the mass market segment as prices there look attractive.

Source : Today – 27 Feb 2012

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