This follows a 12% price decline for the last four years.
Residential prices are projected to rise 8% next year as the property market is on stable enough footing even without the necessary assistance from the government, according to Morgan Stanley.
The residential property market is expected to rally as home prices are to rise a forecasted 2% this year following a 12% price decline in the preceding four years thanks to sustained wage growth.
However, unsold inventory levels of 17,000 units hit record-lows which are projected to rise even further as more housing units are to be launched in the next two years.
Nevertheless, analyst Wilson Ng expressed optimism that new supply will be met by appropriate market absorption as home purchases are tracking at 12,000 units in the past 12 months.
Similarly, vacancies are expected to improve in the near term as the glut of housing supply is to be removed following the demolition of en bloc condominium units.
However, Ng admits that the improvement is likely to be unsustainable.
“Longer term, from 2021 onward, we agree reasons driving the near term vacancy improvement will likely reverse. This, together with effective existing and potential housing policies, will probably limit the length of this property upcycle to within the next 4 years.”
Do you know more about this story? Contact us anonymously through this link.