Private home prices in Singapore are expected to drop by up to five percent due to an oversupply of residential properties from 2014 onwards, said Kwek Leng Beng, Executive Chairman of City Developments Limited (CDL).
Such a scenario could be averted if curbs on foreign buyers of private homes are reviewed and the local as well as global economy rebound strongly.
"The group would rather err on the side of caution in its land replenishment strategy," CDL noted.
Kwek said that private home prices would likely drop by five percent from now until 2014 if all the cooling measures implemented by the government remain in place.
"I don't believe for a moment the market will collapse, but I believe it can go down. I believe the government is astute enough that by 2015 or thereabouts, it may possibly remove some of the (cooling) measures - because 90.2 percent of Singaporeans own property and it is not their intention to crash the market."
He added that it would be "suicidal" to buy land in Singapore given the current high prices and the government's latest ruling that new homes should be sold within two years of completion.
Developers of luxury residential projects are now subject to conditions of a "qualifying certificate" that includes the two-year deadline. Developers can also request an extension for a fee.
"With these qualifying certificates, it will be suicidal to keep buying land at high prices just because we want a land bank," Kwek said.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email firstname.lastname@example.org
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