In yesterday’s BT, an article reported OCBC’s projection of private home prices here to slip between 5 to 15% over 2016-2017. In the same article OCBC projected that primary home sales will be between 6K to 9K units, and home rents may drop up to 15% over the same period. The bank though made a caveat that there is a still a strong demand from buyers entering the market at lower price points so price crash beyond 20% would be improbable.
The following market drivers would loom over the next 2 years:
– home oversupply
– rising mortgage rates
– potential reversals of the existing cooling measures should the market crash.
The cooling measures that are keeping current home prices at bay includes the sellers’ stamp duty (SSD), additional buyer stamp duty (ABSD) and total debt servicing ratio (TDSR). The former two are believed to be targets of adjustment by the authorities should the market plunges deep into further south territory.