Just when Singapore's residential property market was reviving after a four-year slump, government moves to curb the exuberance might play spoiler going into the new year.
Home prices that are forecast to climb as much as 10 per cent this year could remain flat next year, and may decline as much as 3 per cent, estimates from property brokers compiled by Bloomberg News show. Home sales that lagged behind 2017 levels this year may once again be below that mark next year, according to forecasts.
"The market has come to a standstill," said Mr Lee Nai Jia, Knight Frank's head of research in Singapore. "The Government is unlikely to introduce additional curbs or rollbacks as the market is stabilising."
The pace of residential property price increases is slowing after the Government added measures to cool the market in July. Those curbs were prompted after prices rose about 7 per cent in the first six months of the year, fuelled by aggressive land bids from developers and collective or redevelopment transactions.
Additional guidelines that limit the number of "shoe-box sized" apartments developers can build, plus anti-money laundering safeguards that restrict builders, are further constrictions.
The Government said earlier this month it also plans to slow its release of land sales for residential use in the first half of next year, citing a spike in supply and a cooling in demand. The authorities' constant tweaking of rules and taxes surrounding the property market is a worry for home builders, Smartkarma analyst Tan Kok Keong said. It could increase developers' costs and reduce the island's appeal for international players.
Still, the Government maintains it needed to intervene and prevent a property bubble. Private home prices may have risen as much as 15 per cent this year had the authorities not acted, National Development Minister Lawrence Wong said in a speech last month.
"Let me be very clear that the Government cannot and will not take a hands-off attitude to the property cycle," he added. "So there should not be any surprise when we intervene in the market, because that is our approach and attitude."
The Monetary Authority of Singapore said in its annual financial stability review last month that sharp property price increases, if left unchecked, could have run ahead of economic fundamentals and raised the risk of a destabilising correction later.
"Had the Government not introduced the additional curbs, this bull run in the residential market would have continued for three years," said Mr Nicholas Mak, an executive director at real estate asset manager ZACD Group. He expects prices to remain flat next year in a best-case scenario, but said declines of up to 3 per cent could occur.
Aggressive land bids from developers are also expected to ease next year. Collective sales have totalled $10.8 billion from 37 transactions so far this year, according to CBRE Group. That is expected to fall to about one-tenth of that value next year, said Mr Desmond Sim, CBRE's head of research for Singapore.
"Given the sizeable supply pipeline from public land tenders and private collective sale sites accumulated before the curbs, developers are likely to be more cautious," said Ms Tricia Song, head of research for Singapore at Colliers International Group.
Developers "may pace out their launches to ensure the market remains sustainable in the coming year".