Singapore property prices could drop six per cent, says Cheung Kong exec

Residential property prices in Singapore could see a dip of up to six per cent when interest rates begin rising, a senior executive from Cheung Kong Holdings told Reuters.

But despite explosive growth in the housing markets of Singapore, Hong Kong, and China, a collapse is unlikely, said Justin Chiu from Cheung Kong.

“In Singapore, because the government has always been paying attention to the housing market, I would say the fluctuations would be much smaller, in the single-digit range,” Chiu said. Even if it were to come down, it will probably be five, six per cent maximum.”

Chiu predicted that overall activity in the housing market would slow, saying that he was already seeing fewer transactions in Singapore.

New private home sales in Singapore fell 13 per cent in May from a month ago, the city-state’s land planning authority said on Wednesday, signalling greater caution among buyers amid new government measures to cool the housing market.

Although bubbly property markets in Hong Kong, China and Singapore have raised concerns of a collapse, Chiu did not see this happening as non-speculative demand for houses remained firm, buoyed by strong economic growth.

However, Hong Kong’s residential market was more speculative in nature than Singapore’s as it has more international buyers. Thus, it could see bigger fluctuations compared to Singapore, he said.
“Hong Kong, Singapore, China, won’t see a collapse but there’ll be some minor fluctuations, adjustments, correction as a result of government actions and buyer sentiment, but this won’t lead to a major collapse,” said Chiu.

Hong Kong, home to the world’s most expensive residential and office properties, has seen housing prices rise 12.5 per cent this year.

Like its Asian neighbours, it has implemented policies to curb speculative demand, such as slapping stamp duties on short-term transactions and lowering loan-to-value ratios.