, Singapore

Why a severe dip in home prices is unlikely

It could only drop 3-7% next year, says analyst.

OCBC Investment Research argues that a severe dip in home prices is improbable given the high price elasticity of demand in the housing market - that is, the city likely see significant buyer demand coming into the market at lower price points.

In 2017, the research house forecasts for private residential prices to dip 3% - 7% and private residential rents to fall 5%-10%.

It also expects primary residential sales to remain muted at between 6k and 9k units in 2017.

According to OCBC Investment Research, despite prices continuing their downtrend in 2015 and 2016, the rate of sales appears to have stabilized near that in 2014 (~1.8k–2.0k units sold per quarter), with about 5.7k units sold over 9M16 to date.
 

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