Mass-market home prices expected to hit bottom in mid-2016

Policy will be eased after May.

Mass-market home prices are expected to continue their decline in coming quarters and hit bottom by mid-2016, a report by Barclays said.

Barclays noted that mass market prices to fall another 10% by mid-2016 as mortgage rates rise.

“We expect prices of mass market projects to continue to trend downwards due to the large supply scheduled to come on stream between 2014 and 2018. However, we expect new supply completions to dip beyond 2018 due to the tight Government Land Sales policy since 1H12 and the low level of developer sales since the Total Debt Servicing Ratio (TDSR) policy was introduced in June 2013. We see the likelihood of a reprieve from the unwinding of property tightening measures happening after the general election, which has to take place by May 2016,” the report noted.
 

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