A further slide in residential home prices in 2016 may finally persuade the Singapore government to take its foot off the brakes in Asia’s worst-performing property market.
Property brokers including Knight Frank LLP and Jones Lang LaSalle Inc. said the government may be swayed to lift some of the curbs that have depressed local home sales and damped values. Home prices could drop as much as 8% this year, extending a similar decline since their peak in 2013, if an economic slowdown in the island-state becomes severe, according to Ong Teck Hui, National Director of Research & Consultancy at Jones Lang LaSalle in Singapore.
“All the noises from the government are that cooling measures are here to stay,” Nicholas Holt, Singapore-based Asia- Pacific research director at Knight Frank, said. “I’m sure that behind closed doors they are talking about possible tweaking of some of the cooling measures,” he said, especially given slowing macroeconomic growth, falling home prices and rising mortgage rates. Knight Frank estimates residential values may decline between 3% and 6% this year.
Singapore has been successful in cooling its property market -- maybe too successful -- with a slew of measures to tame record prices introduced since 2009. Home values dropped for a ninth quarter in the last three months of 2015, posting the longest losing streak in 17 years, and last year’s sales are set to be the lowest in seven years.
The measures -- which include a cap on debt repayment costs at 60% of a borrower’s monthly income and higher stamp duties on home purchases and sales -- have drawn the ire of the city-state’s largest developers. City Developments, Singapore’s second-largest builder, in November called on the government to review property curbs “as soon as possible” as demand for apartments weakens.
Prices slid 3.7% last year, almost matching the 4% drop in 2014, which was the first year-over-year decline since 2008. Prices rose to a record in 2013, prompting the government to add additional residential property curbs as low interest rates and demand from foreign buyers raised concerns that the market was overheating.
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Property brokers including Knight Frank LLP and Jones Lang LaSalle Inc. said the government may be swayed to lift some of the curbs that have depressed local home sales and damped values. Home prices could drop as much as 8% this year, extending a similar decline since their peak in 2013, if an economic slowdown in the island-state becomes severe, according to Ong Teck Hui, National Director of Research & Consultancy at Jones Lang LaSalle in Singapore.
“All the noises from the government are that cooling measures are here to stay,” Nicholas Holt, Singapore-based Asia- Pacific research director at Knight Frank, said. “I’m sure that behind closed doors they are talking about possible tweaking of some of the cooling measures,” he said, especially given slowing macroeconomic growth, falling home prices and rising mortgage rates. Knight Frank estimates residential values may decline between 3% and 6% this year.
Singapore has been successful in cooling its property market -- maybe too successful -- with a slew of measures to tame record prices introduced since 2009. Home values dropped for a ninth quarter in the last three months of 2015, posting the longest losing streak in 17 years, and last year’s sales are set to be the lowest in seven years.
The measures -- which include a cap on debt repayment costs at 60% of a borrower’s monthly income and higher stamp duties on home purchases and sales -- have drawn the ire of the city-state’s largest developers. City Developments, Singapore’s second-largest builder, in November called on the government to review property curbs “as soon as possible” as demand for apartments weakens.
Prices slid 3.7% last year, almost matching the 4% drop in 2014, which was the first year-over-year decline since 2008. Prices rose to a record in 2013, prompting the government to add additional residential property curbs as low interest rates and demand from foreign buyers raised concerns that the market was overheating.
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