DBS BANK: Home prices may drop 15% this year

SINGAPORE — Singapore home prices may fall by 10-15 per cent this year as government cooling measures and tougher limits on borrowing continue to dampen the property market, DBS CEO Piyush Gupta said today (Feb 14).

“The top-end of the market is likely to be 15 per cent, the lower-end more likely 10 per cent. The quantum and extent of correction will obviously be equally a function of the government and MAS (Monetary Authority of Singapore) tweaking the macroprudential policies,” he said at a briefing on DBS’s results for the fourth quarter of 2013.

Mr Gupta’s views were more bearish than that of most property analysts, who see home prices declining by 5-10 per cent.

But DBS, which reported on Friday a six per cent rise in fourth quarter profits, is not overly concerned about a sharp correction in residential property prices.

According to Mr Gupta, stress tests carried out by DBS showed that it can easily withstand a 30 per cent reduction in Singapore home prices.

Singapore private home prices fell 0.9 per cent quarter-on-quarter in the last three months of 2013 — the first decline in almost two years as the government’s mortgage curbs took effect.

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