homefinder: What do you think the market is going to be like in 2015?
Tang Chee Meng: The residential market will continue to soften in 2015 with a further decline in the number of transactions. However we do not think that there will be any drop in prices unless the country’s economy suffers a drastic downturn, which at the moment, we think is unlikely.
The implementation of GST effective April 2015 will create some uncertainty and anxiety amongst investors and could lead to a wait and see situation immediately after the implementation of GST. In fact, there is likely to be an upward revision in prices as developers try to recover the additional costs arising from the GST that they will have to pay for construction, building materials and professional services. We think that it will have to wait until the second half of 2015 before we can see a return of interest in the market.
Assuming a crisis is indeed coming, what are some of the measures you can suggest to avert from this crisis?
The government will obviously have to step in and scale down the cooling measures that it has implemented so far to cool down the housing market eg. they can reduce the RPGT, grant an exemption or rebate on the stamp duty until the market situation improves and loosen lending restrictions.
What remains a good proposition for the property market?
Landed residential properties will still be in demand unless they are overpriced. The industrial sector will still be stable unless exports see a sharp decline. Shops located in growth areas will also be able to attract interest.