3 reasons why analysts are predicting a 10-15% drop in property prices

This will be in 2014-2015.

CIMB analysts continue to expect a 10-15% drop in property prices in 2014-15.

This is fueled by 1) the decline in investment and foreign demand; 2) higher price sensitivity within the upgraders segment and 3) significant supply in the pipeline.

Here's more from CIMB:

Our recent ground checks suggest that it is still a buyers’ market, particularly in the secondary market.

Prices are just beginning to come off. We believe the catalyst to drive down physical prices will be supply, with 17,540 and 21,299 units expected to complete in 2014-2015 respectively, more than two times the 20-year historical average supply of 8,034 units p.a..

Mitigating factors. We take comfort in the fact that buyers are generally not over-leveraging to buy residential properties, at 5-6x home price-to-income ratio and 23-29% mortgage-to-income ratio.

Moreover, developers have diversified into investment properties and overseas, with the Singapore residential segment making up less than 30% of GAV for most developers.

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