Is a home price crash of over 20% possible in Singapore?

Local home prices had already dipped 8% since 4Q13.

Domestic private property prices staged a strong recovery post 2008 financial crisis, thanks to strong activity in the mass market segment. The story however does not end there.

According to OCBC Investment Reseach, mass market prices rebounded 63.2% from its crisis troughs, while the luxury segment (CCR) put up a more muted 36.1% increase. Private home prices reached an inflection point, however,in 3Q13 after the latest round of property curbs implemented in June 2013, which included the landmark Total Debt Servicing Ratio (TDSR) requirement. A broad-based slow bear market subsequently ensued, and prices fell 8.0% over eight consecutive quarters from 3Q13 to 3Q15.
Will the downtred continue or

Eli Lee, analyst, OCBC Investment Research

We forecast that private residential prices would dip 5% - 15% over 2016-17 and that 2016 primary residential sales would remain muted at between 6-9k units. We also expect residential rentals levels to fall 8%-15% over 2016-17 and vacancy levels to increase from 7.8% currently to about 10% by end 2017. That said, a price crash in
excess of 20% is improbable, in our view, given the high price elasticity of demand in the housing market; that is, we will likely see significant buyer demand coming into the market at lower price points.

Derrick Heng, analyst, Maybank KimEng

4Q15 URA data show the completion of almost 19,000 private homes in 2015. This is less than the 21,359 expected at the start of the year and suggests that developers may have slowed down their construction to ease oversupply. We reiterate that prices could bottom by end-2017, with cumulative price falls of 13-16% from their peak.