Private home prices feared to plummet by up to 15%

Blame it on supply glut.

Singapore's property sector will remain on the rocks as looming oversupply will continue to put downward pressure on private home prices.

According to a report by OCBC Investment Research, physical oversupply remains a key headwind until 2017.

"Given that the market remains in a state of physical oversupply over 2016-17, we continue to forecast for private home prices to grind 5- 15% lower over this period and also expect pressures on rental rates to persist," the report stated.

OCBC added that property sales in August were at a disappointing 7.8% decline from the record last year.

Meanwhile, OCBC also noted that authorities have already clarified that the recent tweaks of refinancing rules under the Total Debt Servicing Ratio rules should not be construed as an easing of property curbs.

"...the recent TSDR tweaks give existing borrowers more flexibility in managing their debt obligations at lower rates and and would add a measure of stability in the balance sheets of existing borrowers – which is overall positive for the housing market and the banks’ balance sheets," OCBC explained.