Property prices to drop 5% this year

While luxury homes will likely be 5-8% cheaper.

According to UOB Kay Hian, private residential price growth picked up in 4Q12 with a 1.8% qoq rise vs 1% for 9M12, resulting in an overall price hike of 2.8% in 2012.

The mass market segment witnessed the highest 6.5% yoy price increase, followed by 1.6% in the mid-tier and 0.8% in the high-end segment.

In tandem, public housing prices grew 2.5% qoq (6.6% yoy). In 2013, we expect property prices to fall 5% on average with the mass market segment seeing a 2-3% price correction and high-end prices correcting by 5-8%.

"However, property prices will be stable in the longer term, supported by stable employment levels, growing wages and an increase in population," UOB Kay Hian said.