Singapore’s housing market may face “fire sales” with mortgage defaults as the government’s property curbs hurt home sales and prices, the city-state’s second-biggest developer said.

City Developments Ltd. (CIT), which built luxury condominiums such as St. Regis Residences near the Orchard Road shopping belt, said the high-end market in particular remains subdued, with developers holding back the sale of new projects. Rents, especially for high-end homes, are on the decline, it added.

“If this trend continues, with prices dipping more, some mortgage borrowers affected by lower rentals, may have difficulty servicing their loans, possibly leading to forced fire sales,” the company said in a statement yesterday, adding that the curbs will “weigh heavily on the market.”

The government said last month that there’s some distance to go for Singapore’s home prices to achieve “a meaningful correction,” signaling the longest stretch of declines in housing values since the global financial crisis may not be enough to prompt the city to ease its curbs.

Singapore’s private home prices fell 0.7 percent in the three months ended September, the fourth quarter-on-quarter drop, bringing the slide in the past year to almost 4 percent. That’s the longest losing streak since 2009, when the government started introducing measures, with some of the strictest implemented last year, including a cap on debt.

Further Decline

“Homebuyers are waiting and watching because they think prices will decline further,” said Alan Cheong, a Singapore-based director at broker Savills Plc said. “Prices will languish into next year as developers have no confidence to raise prices with sentiment so low.”

The government said the share of homebuyers taking up multiple mortgages has slid to 13 percent of new housing loans in the second quarter from 30 percent in 2011.

Other developers share City Developments’ concerns. CapitaLand Ltd. (CAPL) , its biggest publicly traded competitor in Singapore, said earlier this month “the real estate cooling measures and concerns over interest rate hikes continue to weigh down the market.”

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