Expect 5-15% drop in home prices by 2015: Barclays
On back of higher interest rates.
According to Barclays, it expects prices to fall by an average of 5% in 2014 and by a further 5-15% in 2015 as interest rates rise, and Barclays estimates the vacancy rate could reach an unprecedented 9.9% by 2016.
Secondary transactions declined 51% y/y in 2013 to 7,680 units compared with 15,676 units for 2012, down 70% from the peak of 25,843 units in 2007.
We believe the fine-tuning of the TDSR measures last week should bring some relief to marginal homeowners, but the measures do not change our view that fundamentals are likely to remain weak for the next 2-3 years. We continue to expect developer volumes to fall 20% y/y to 12,000 units in 2014 from 14,980 units in 2013.