Here's proof that property cooling measures will be eased soon

The HDB resale market is in the spotlight.

Singapore government may soon roll out demand-side easing measures, according to a report by UOB Kay Hian.

UOB Kay Hian posits that the government will intervene if the HDB resale price index pushes past the 10% threshold, which may not be far off. 

Q3 data revealed that after nine consecutive months of decline, the public house index has already tumbled 9.9% from its peak in the second quarter of 2013.

“We reckon that the government would be galvanised to undertake some demand-side easing measure as the price index breaches the 10% threshold from the peak,” UOB Kay Hian said.

Moreover, the correction in public housing prices showed some moderation as it dipped 0.3% QoQ in 3Q15, following a 0.4% QoQ slip in 2Q15. 

Prices are likely to moderate even further and leave demand for resale flats in the dust as demand curbs fuel demand for new flats.

“The segment could see further price moderation as demand curbs, such as limitations on Permanent Residents (PR) purchases, together with the higher supply from HDB and the delinking of prices for new flats from resale prices, will continue to spur demand for new flats vs resale flats,” said the report.