Private property prices may fall 12% in the first few months of 2012

Although sales of new private residential properties are very high just a month after the new Singapore property cooling measures targeting non resident foreign investors, some analysts are expecting private residential property prices to fall as much as 12 per cent over the next three months of 2012 and 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. 

ECG Property managing director Shawn Tan told MediaCorp that "the additional stamp duties hinder upgraders which form up the majority number of the mass market purchasers. We should be seeing a bit of correction in prices, say 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. 

SLP International Property Consultants executive director Nicholas Mak said "the strong sales in January were due to the strong take-up in 4 new launches in that month"."
Source : Private property prices to fall up to 12% over next 3 months: Analysts

Demand on private sales has already been falling  in Singapore in 2011. Demand fell sharply by 18.6% compared to 2010. The fall would be sharper if the number of private residential properties bought by foreigners did not rise 20.4 per cent to a record high last year! If new property cooling measures dampens the foreigner demand, the sales will fall sharper than 2011.

Four popular projects sold well last month: The Watertown (770 units), The Hillier (387 units), Parc Rosewood (198 units) and The Rainforest (executive condominium) (172 units). But the rest have only sold 550 units, close to 670 units sold in December 2011. The more worrying trend is that most of the units sold were very small 1 bedroom or 2 bedroom units preferred by investors. Singapore's property stock is changing rapidly in the past 10 years due to ultra expensive prices and units are shrinking in size while increasing in price.