Cooling measures not expected to be eased anytime soon?

SINGAPORE — Residential property prices could begin bottoming out over the next few quarters, prompting a “moderate” recovery from 2018, but there would not be any easing of cooling measures until next year at the earliest, according to industry experts at a property market seminar organised by the Real Estate Developers’ Association (Redas) yesterday.

Depending on economic growth and other macroeconomic factors, said Dr Chua Yang Liang, head of research at South-east Asia at JLL, the potential recovery range is likely to be in line with gross domestic product growth, and driven largely by a pickup in the prime residential market. Upcoming executive condo launches include Yio Chu Kang EC, Inz Residence EC, Choa Chu Kang EC, Anchorvale Lane EC,  while existing ones include The Terrace EC, Brownstone EC, The Vales EC, Parc Life EC , Sol Acres EC, The Visionaire, Bellewoods EC, Signature at Yishun, The Criterion EC and Northwave EC.

“(Singapore’s housing prices) are close to a trough with economic conditions steady and physical market conditions balancing … The gap between the prime and non-prime market has narrowed and when economic conditions improve, we should expect the high-end market to pick up,” said Dr Chua.

In the mass market space, growth in demand will continue to be slow with gradual price adjustments given the supply overhang and policy measures, he added. The residential rental market will also continue to remain soft.

The Government has imposed multiple rounds of property cooling measures and loan curbs since 2009 to tame the runaway housing market, the most significant being the Additional Buyer’s Stamp Duty (ABSD) and Total Debt Servicing Ratio (TDSR) framework.

Despite repeated calls from developers and agents for the measures to be lifted, the Government has repeatedly signalled its reluctance to do so, with Minister for National Development Lawrence Wong saying in April that it is “too early to declare victory”.

Private home prices in Singapore surged more than 60 per cent after the global financial crisis in 2009 to peak in the third quarter of 2013.

Since then, prices have declined 9.4 per cent over 11 consecutive quarters to log the longest losing streak on record, according to second-quarter flash estimates by the Urban Redevelopment Authority earlier this month.

Even so, industry experts are not expecting the cooling measures to be eased anytime soon.

“I think the earliest we may see some unwinding of measures will be 2017 because we haven’t quite reached the double-digit price correction that they want,” said Ms Selena Ling, head of treasury research and strategy at OCBC.

Dr Chua too, said he does not expect any changes in property cooling measures “given the fact that market activities in terms of transaction volumes have been rising gradually and the slight uptick in pricing”.

The flash estimates by URA this month showed the private residential property price index fell 0.4 per cent in the second quarter, a slight improvement over the first quarter’s 0.7 per cent decline.

In a bid to move sales amid weaker demand and the huge supply in the market, developers are cutting prices by between 5 and 25 per cent at some projects, said Redas president Augustine Tan.

“With the cooling measures still in force, the real estate market continues to face disruptive forces on multiple fronts — from weak demand and hefty supply to manpower constraints and challenging business environment,” said Mr Tan.

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