Chart of the Day: See the correlation between GDP growth and residential property prices

Price growth could hit -3% to 2% in 2019 amidst predicted slower economic growth.

This chart from OCBC Investment Research shows that historically, slower economic growth weighs on residential property prices, with correlation between private residential price growth and real GDP growth at 0.74 from 2006 to 2017.

With this, the firm expects that the growth of private home prices would come in near the low-end of around 8% to 10% for 2018.

“Moving into 2019, we are projecting price growth to range between -3% to +2%, as slower economic growth and the deluge of new launches may act as a dampener on home prices,” OIR said.

The research firm believes that private transaction sales volumes will hit 8,000 to 10,000 in 2018, and about 10,000 to 12,000 in 2019, noting Bloomberg consensus forecasts that Singapore’s economic expansion is predicted to slow down to 2.7% from the projected 3.3% in 2018. we project 8k-10k units for 2018, and 10k-12k for 2019.