SINGAPORE — Home prices in Singapore are likely to continue falling even though the Singapore Government could further ease its property cooling measures, says rating agency Fitch.
Oversupply and rising interest rates will persist, and house prices are likely to fall by another 2 per cent to 5 per cent over the next two years, said a Fitch report released yesterday.
It added that Singapore’s efforts to curb property speculation from 2009 have been effective, and speculative purchases have declined as restrictions on mortgage lending were made progressively tighter and stamp duties were raised.
However, the Government’s “first, modest move” to reverse tightening measures last week, in lowering seller’s stamp duty and the holding period, as well as the removal of the 60 per cent cap on the total debt servicing ratio for some mortgage equity withdrawal loans, are unlikely to have a significant impact on Singapore’s housing market, noted the report.
“Macro-prudential settings are still tight, while high vacancy ratios, a slower pace of immigration, subdued economic conditions and a weakening labour market are all likely to continue weighing on prices,” said Fitch.
“Local interest rates are also set to rise from their current low levels, as the US Federal Reserve tightens policy,” it added.