It's simply not sustainable.
According to PropertyGuru, the number of private home sales in Singapore could drop by more than 20% in 2013 after “spectacular” increases this year.
Here's more from PropertyGuru:
David Neubronner, Head of Residential Project Sales for Jones Lang LaSalle (JLL), issued the warning this week, suggesting that the number of sales this year, which is expected to reach 22,000 units, will correct to “more healthy levels of about 16,000 units” in a worst-case scenario.
He says: “Put in perspective, the jump this year from 15,800 in 2011 to probably 22,000 by end 2012 has been spectacular. We believe this is not sustainable moving forward and should correct next year. In the worst scenario, we estimate the market to correct to the healthy levels of about 16,000 units which were achieved in 2010 and 2011. This is taking into account the anticipated economic slowdown in 2013, clampdown on residency and employment of foreigners.”
Neubronner is not ruling out a further wave of government cooling measures. He says: “The possibility is always there as long as the buying continues. Based on the recent robust sales volumes and concerns of market foaming, there is always the possibility of another round of measures to take the steam out of the market.”
Neubronner predicts that landed property sales will remain resilient given the limited supply and perennial demand, along with the general aspiration of Singaporeans to upgrade to a landed property.
The luxury segment has seen sales volume and values declining over the past year and, according to Neubronner, should bottom out any time soon. The mass and middle market segments are expected to see most of the correcting in 2013, he says, adding that these sectors have been running up rapidly over the past year.
Neubronner also expects the proportion of foreign buyers, which now stands at roughly 20%, to stabilise. He says: “Singapore will continue to attract foreign buying interest for a million reasons and we believe the series of measures introduced over the past years will more likely subdue the Singaporeans appetite than the foreigners.”
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