Private home prices here have maintained a moderate pace of decline despite the plunge in new home sales in the third quarter because of the impasse between buyers and sellers, data released on Friday morning shows.
The Urban Redevelopment Authority's property price index for the third quarter of this year show that prices slipped 0.7 per cent in July to September period, its gentlest fall since home prices turned south a year ago.
Developers only recorded sales for 1,531 condo units in the three months to Sept 30. The tally has not been this low since just 419 homes were sold in the fourth quarter of 2008, amid the woes of the financial crisis.
Dr Chua Yang Liang, head of research and consultancy, JLL Singapore:
Barring any major external shocks to the market, the pace of decline in private home prices will be like what we've seen in the past few quarters. But it's very hard to predict which is the last grain of sand that will cause the pyramid to crumble.
Developers are still taking a very measured approach to cutting prices, but there are other factors they have to consider that will affect how many units they can afford to hold back.
R'ST Research director Ong Kah Seng:
The stalemate is expected to continue for another quarter, though sellers might become more realistic in the first half of next year so prices will likely dip more then compared to now.
Developers will be more eager to cut prices, especially those whose projects were launched a while back and those with projects in locations where earlier projects have soaked up demand.
There are signs of oversupply in such suburban locations as Yishun, Sembawang and Canberra. While the Jurong East and Lakeside area is more promising, that hinges on the rejuvenation of Jurong East.
Ms Chia Siew Chuin, director of research & advisory, Colliers International:
Over the last three months of the year, with the private residential property market continuing to operate amid the strict financing and regulatory environment, mounting downside risks are likely to further temper demand for homes and weigh down prices.
This is on the back of uncertainties in the global arena, which are expected to generate turbulence in the financial markets and hamper growth in the domestic economy.
Additionally, longstanding threats of an impending interest rate increase and a looming supply of homes remain. With homebuyers maintaining a cautious stance, the take-up of new homes in 2014 could potentially fall to between 7,000 and 8,500, down from 2013's 14,948 units.
Mr Alan Cheong, senior director of research and consultancy, Savills Singapore:
Prices have remained static since the third quarter of last year, but there are many investors waiting on the sidelines who will become impatient and start committing to the market eventually. The TDSR and cooling measures are just a dyke holding back a sea of liquidity, which will eventually overflow, and the rate of flow will be like how it was prior to the TDSR. These buyers have been building up their reserves too because they have not been buying anything.
The condo market has shown itself to be extremely resilient, and we have to understand the market mechanism rather than apply a generalist view of supply and demand. It will take an event that's so psychologically defeating such as a socio-political crisis, or even biological in nature, like Ebola, to really drive things down.