New year, new house? Don’t buy just yet

The influx of new housing supply at the time of global economic woes might drive home prices down this year.

Colliers International said in a statement that home buyers are “expected to hold a cautious stance and hold out for possible price declines” with the foreseen cooling of the housing market due to Singapore’s easing of its GDP projection for 2012 from 4-5% to between 1 and 3%.

The property adviser said “another catalyst” for price decline would be the moderation in the developers’ level of participation given the abundant incoming supply. A drop in land bid prices are also likely, the firm said.

Colliers International noted, however, that the imposition of the additional buyer’s stamp duty effective from 8 December 2011 could shave off some level of buying demand.

The high-end/luxury and mid-tier markets are expected to be worse hit as foreign buyers, which will be affected by the ABSD, form a major demand base in these segments.

Prices of the higher-end /luxury segment could correct by up to 15% in 2012, Colliers International said.

In the mass-market segment, the grim market outlook and job prospects could stall buying decisions, the property adviser said.

Prices for the segment could correct by up to 10% as prices are likely to be affected by the arrival of an ample supply of mass-market homes.