Private home market must brace itself for the 'real litmus test' soon

There'll be a slew of new projects.

According to Colliers International's comments on URA's flash estimates, the outlook for the private residential market remains cautiously optimistic.

With the market more attuned to the latest cooling measures, the coming months will be the real litmus test for market demand, as more new residential projects – particularly from the ramped up Government Land Sales programme – are progressively launched.

Home demand will continue to be supported by first-time home buyers and public flat upgraders, and incentivized by developers’ creative marketing strategies.

Here's more from Colliers International:

Developers are likely to continue dangling sweeteners – to cushion the impact of ABSD – to attract homebuyers, which have proven to be relatively successful in luring homebuyers.

These may come in various forms, such as part absorption of the stamp duty, price discounts, early bird or VIP preview prices, among others.

Nonetheless, the seventh round of cooling measures that has come hot on the heels of the mortgage curbs announced in October 2012 serves as a reminder of the government’s unrelenting commitment to tame the market.

Additionally, the growing inertia towards further price appreciation, coupled the sizeable residential home supply that will come on-stream in the next few years, will keep prices in check. The threat of rising interest rates should also contain the risk appetite of home buyers; hence, limiting their propensity to commit to prices extensively above the last done.

These factors should provide for stability and sustainability in the Singapore residential market for the rest of the year. Barring any unforeseen shocks, private residential property prices are expected to continue its flat lining, with projects that feature attractive locational and product attributes enjoying better upside potential.