Loan curbs expected to hit home prices, sales
CapitaLand's statement comes as it reports 0.7% dip in Q2 earnings
Home prices and sales volumes are likely to head south over the next few months as various measures to curb excessive borrowing take their toll on demand, property giant CapitaLand said yesterday.
"The group envisages some headwinds for the private residential property market in the near term," CapitaLand said in its earnings statement.
"Prices and sales volume of Singapore residential property are expected to moderate as the cumulative impact of the various property measures continue to be played out in the coming months," it added.
CapitaLand Singapore chief executive Wen Khai Meng added at a results briefing held at Capital Tower yesterday: "It's difficult for us to make a call at this point, but it may flow to lower volumes. We have no crystal ball."
A few possibilities
- If the vacancy rate for private residential units goes up to around 8 per cent from about 5 per cent now, home prices could drop by 5 to 10 per cent, said UOB Kay Hian research analyst Vikrant Pandey.
- Property prices could fall by up to 10 per cent, mainly in the mass-market segment, which is more likely to include investors who tend to be over-leveraged, said Maybank Kim Eng analyst Wilson Liew.
- Over 9,000 households may face problems paying off their mortgages when interest rates rise, said Religare Institutional Research analysts. That is based on 10 per cent of 90,000 new homes being completed from now to 2016.