By Wong Siew Ying | POSTED: 26 Dec 2013 19:19 | CNA

SINGAPORE

Cooling measures, loan curbs and changes to public housing policies.

Property analysts said 2013 has plenty of them and the measures are likely to ensure a more stable real estate market next year.

They added that private home prices and demand could continue to moderate in 2014.

Over 14,600 units of new private homes, excluding executive condominiums (ECs), were sold in the first 11 months of 2013.

With the year almost up, analysts said sales volume for the whole year will likely pale in comparison to the 22,000 units sold in 2012.

Key reasons for the slower sales include cooling measures and loan curbs.

Among them, analysts said the Total Debt Servicing Ratio framework (TDSR) introduced in June has been a game changer.

Nicholas Mak, executive director for SLP International Property Consultants, said: “With the TDSR, the amount of property investment that a person can make is actually tied to that individual’s income, not so much based on the returns or the earning potential of the asset. So this is actually a very major step which will curtail property investment from the medium to long term.”

Looking into 2014, some market watchers said new home sales are not likely to cross 15,000 units for the entire year.

And SLP International Property Consultants said home prices could either grow by up to 4 per cent or contract as much as 3 per cent in 2014.

Private homes in the city and city fringe are expected to see price moderation.

Analysts said the ever-popular mass market segment may also start showing signs of weakness next year.

Desmond Sim, associate director for CBRE Research, said: “The OCR (outside central region) market, based on our estimation, we foresee (around) 5,000 units would probably come in for sale by the first half of next year. I think the mass market would have slightly bigger pressure to price them correspondingly. The price correction going forward probably could be up to 5 per cent.”

Anticipating a more challenging environment, analysts said developers could roll out incentives like rental or capital appreciation guarantees, and discounts to attract buyers.

But consultancy Jones Lang LaSalle said it is important for developers to space out the launches next year.

Ong Teck Hui, national director of research and consultancy at Jones Lang LaSalle, said: “If you are to price your project reasonably, you can still garner good sales, but the difficulty is when many developers start thinking alike, coming into the market at the same time with reduced pricing, and this will give a perception of a price war which they are trying to avoid. When the buying public sees that, they may withdraw from the market and the situation could in fact get worse.”

Analysts said a record number of homes are also expected to be completed in the next three to four years.

And this huge supply will also weigh on the private resale market, as well as depress rentals amid tighter foreign worker policies.

– CNA/gn

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