Clawback Of Cooling Measures Only After 6-11% Price Correction

The recent remarks by Finance Minister Tharman Shanmugaratnam that it is too early to start relaxing cooling measures sits in line with PropertyGuru’s view that whilst transaction volumes have been declining, sale prices are not following suit.

Adding to Finance Minister Tharman’s statement on not easing up on cooling measures, Steve Melhuish, Co-Founder and Chief Executive Officer of PropertyGuru offers his take: “Private home prices registered its first drop in seven quarters in Q4 2013 with a 0.8 percent fall and public housing posted their second consecutive quarterly drop of 1.3 percent – the worst reading in eight years. I believe it is simply too premature to loosen existing policies for property simply because of this slight drop. Prices have almost doubled for both private and public housing market in the last 2-3 years. For the government to roll back its policies, there must be a price correction of at least 6-11%. This is the standpoint of PropertyGuru as we continue to closely track market trends and proffer estimates.”

Fall in transcation decline in transcation

Private property is expected to see a dive to 3,000 units per quarter and 6-8 % decline in prices. HDB resale units will see a 15-20% decline in transaction volumes leading to 8-11 % fall in prices. The top 5 districts expected to see the biggest price drops are:


1. District 25/OCR Region (-28.89%)

2. District 9/CCR Region (-23.66%)

3. District 5/RCR Region (-22.02%)

4. District 20/RCR Region (-20.03%)

5. District 11/CCR (-16.05%)


1. District 2/CCR (-18.40%)

2. District 28/OCR (-10.42%)

3. District 11/CCR (-9.81%)

4. District 22/OCR (-8.96%)

5. District 21/OCR (-6.15%)

PropertyGuru is not predicting a larger price correction but is offering a muted bearish outlook as remarked by Steve: “A larger quantum and extent of correction will depend on any macro-prudential policy revisions by the Singapore Government and Monetary Authority of Singapore. A sudden devaluation in HDB resale prices over a short period of time must be avoided at all costs. For instance, a major price correction of 15-20% will shock the resale market. Likewise, the increase in housing supply will only come on-stream over the next three years, enabling a moderated supply.”

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