Chart of the Day: See how real estate is reeling from slowing credit growth

Prices are dropping as a result of the collateral impact.

Singapore’s economy is less able to benefit from global recovery this time as several sectors remain to be caught in a sticky situation.

A report by UOB says that Singapore’s property market is feeling the greatest impact from slowing leverage growth.

Primary and secondary transactions of private residential units have softened significantly and URA private residential property price index shows that prices are down 3.2% from the 3Q13 peak.

UOB adds that meanwhile, HDB resale prices are down 5.3% from the 2Q13 peak. Property analysts believe that a multi-year correction is underway and with no indication to date by policymakers of willingness to ease cooling measures in the near term, they expect property prices to fall 10% in 2014.

As a result, construction and consequently fixed capex momentum have also softened, even though public infrastructure pipeline has and continues to be robust with the commencement of large scale projects such as Project Jewel, Changi Airport Terminal 4, Thomson MRT line, Jurong Lake District and other potential high-profile projects such as the Singapore-KL high speed rail.