Originally Posted by Unregistered

Is this a fancy report?

More pain to come for Singapore’s property market

Written by The Edge
Tuesday, 13 January 2009

IF YOU thought the local property market was fairly close to bottom and it was time to start looking at bargains, think again. That’s what US banking giant Citigroup says in a new report on Singapore property titled Bear Trap: Sell into Strength. The way Citi’s property analysts Wendy Koh and Tan Chun Keong see it, there is likely to be a lot more pain in Singapore property in year ahead before we will even see the glimmer of any gain.

Citi bases its pessimistic Singapore property outlook on deteriorating economic fundamentals. The US bank now expects Singapore economy to contract 2.8% this year following a mere 1.5% GDP growth last year and 7.7% growth in 2007. Citigroup strategists are forecasting the benchmark STI will fall to 1,500 again over the next few months before rebounding later in the year to current levels.

As the economy continues to contract, job losses mount and bank lending slows, Citi forecasts mid–tier to high-end residential property prices in Singapore could fall another 35% bringing “prices back to 1998 levels” or down nearly 45% from their peaks.

For the mid-tier segment, where prices have already fallen some 20% from their peaks a year ago, Citigroup forecasts prices are likely to fall further in the absence of an overall housing oversupply. “For luxury properties such as Ardmore Park that have (already) seen price correction of approximately 35% from a year ago, we think prices could potentially fall by another 30-40% to reach the 2003 and 1998 levels,” the Citi report said. This implies a 55–60% decline from their peaks in 2007.