Mass-market home prices predicted to slip 5-15% in 2014

Will there also be a drop in posh home prices?

According to OCBC Investment Research, while the Fed Fund rate is expected to stay at low levels until at least 2015, it expects increasing caution to set in as the overhang from government measures remains in play and the market grapple with an onerous pipeline of physical supply coming ahead.

Over FY14, OCBC's forecast for mass-market residential prices is a dip of 5%-15% and 0%-10% fall for high-end residential prices.

Here's more from OCBC:

In light of the subdued outlook for the domestic residential sector, we favor large-cap developers with strong balance sheets and diversified exposure across regional real estate markets. Our top picks in the space are CapitaLand, rated BUY with a fair value estimate of S$3.77 (30% RNAV disc.), and Keppel Land, rated BUY with a fair value estimate of S$4.09 (30% discount to RNAV).

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