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3 Oct 2013

Home prices could dip 20% by end-2015

Source: The Straits Times
By:Cheryl Ong

Home prices could fall by as much as 20 per cent by the end of 2015 in the wake of oversupply, tougher loan rules and rising interest rates, say analysts.

One warning comes from a Barclays report which noted that risks from a number of directions are putting pressure on residential values and hitting demand at new launches. "We expect developer sales to fall by 30 per cent in 2013, as the latest sets of measures bite," it said.

In a separate report, CIMB said that a large supply of new homes set to hit the market could cause prices to correct by 10 to 15 per cent by 2015.

Affordability has become more of an issue since new loan curbs were introduced in June. These cap a borrower's total monthly debt payments at no more than 60 per cent of his gross monthly income.