Home Price to fall another 15% at least?

Stock market is rising, but how about the home price? In fact, no one knows the answer. But some economic data may help us have a guess. Lets take a look on the figure on the left for the income per capita versus the property price index. You can see the peak during 1995 and 2007. Since then the property price index fall greatly below income per capita.

However, most people still believe there are more rooms for the price to drop further. As there are more and more people become jobless, fresh graduates are not able secure a job. More foreigners are leaving this country.


Current price:
Mass-market = SGD 600-700 psf;
Mid-end = SGD 900-1,000 psf;
High-end = SGD 1,500-3,000 psf


Coming?
Mass-market property to fall another 15-20%
Mid- to high-end property price to fall another 25-30%


What we see now: Sharp price fall on thin volume
Mass-market: 10-15% drop
e.g. F&N’s Caspian, Lakeside (Priced at SGD550-650 psf)

Mid-end: 20-35% drop
e.g. Roxy-Pacific’s Nova 88, Novena/Balestier (Priced at SGD850-950 psf)

High-end: 40-50% drop


Few developers cut prices on launched projects
(recently sold price vs launch price / peak price)
Ritz-Carlton Residence, Cairnhill (SGD 3,000 psf vs. SGD 4,515 psf)
The Rochester @ Buona Vista, by UE (SGD 1,005 psf vs. SGD 1,274 psf)
The Quartz, Sengkang (SGD 600 psf vs. SGD 750 psf)


Soon you willl see the gap between high-end and low-end property get narrow, just like the private and HDB get narrow now. Then HDB price will start to fall to make the gap larger, and after some time, low-end private will follow to wider the gap with high-end private housing. Don't forget, housing market always 6 months lag behind stock market.


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