For Singapore's property market, the writing's on the wall for analysts and realtors alike.

In an opinion that managed to surprise exactly zero people, Morgan Stanley has shifted its position on two key developers from overweight and equal weight to underweight. What most people would be more interested in, however, is their prediction that housing prices would likely decline three per cent in 2024 due to indicators such as housing vacancies and sales. Consider this:

Normanton Park with 1,862 units is completed this year, as is Treasure at Tampines (2,203 units) and Parc Clematis (1,468 units). These are some of the biggest developments to date, and they're all being finished the same year. 

New launch prices are averaging $2,100 to $2,300 psf, and realtors are already complaining HDB upgraders are backing down. Even if you could sell your 5-room flat for $700,000, what can you afford to upgrade to? The typical new launch three-bedder is now over $2.1 million.

We're seeing more and more Deferred Payment Schemes (DPS) reappear on the market. These are usually a sign of developers struggling to move their last few units; and there's a need to make the payment more attractive. 

60 per cent ABSD for foreign buyers, coupled with slashed taxes in our rival Hong Kong, is likely to drain away foreign investment; particularly for higher-end central region condos, and luxury homes. 

In the HDB market, the government has gone into overdrive, completing 23,782 in 2022, which was the highest in five years; and more will be finished this year. 

Even developers sense the change, growing more cautious in their bids despite the last tranche of en-bloc properties (back in 2017) being long-since redeveloped. A recent sign has been the closing of Pine Grove (Parcel B), where the highest bid of $1,223 psf ppr is lower than the $1,318 UOL paid for Parcel A (and let's not forget the lower number of

The supply crunch is, broadly speaking, over; and the new hurdle is the combination of rising interest rates, plus the mind-boggling heights that prices have risen to. I also think that the April 2023 cooling measures are too recent for us to really gauge the impact yet, and next year is when we'll truly start to see its teeth. 

With luck, HDB upgraders will again be able to afford new condos (or at least sizeable resale ones). I know most property agents are on their side, as many realtors are now fighting for a supply of properties to sell.  

(That's also a warning: you'll soon get a lot more flyers and calls, insisting your flat can now provide a retirement with 50 per cent more bird's nest per week, so call me now to sell, etc.)

In any case, let's also not forget that the Government still has a lot of levers to adjust (all those cooling measures) — if there are signs that property prices may drop more than expected. 

Besides, buying at a low doesn't mean much if you aren't selling at the right time either (just take a look at some of these examples). 

And while I used to think the government could help by dropping land prices, my naivety was checked by clearer heads 

Why doesn't the government just lower Land Betterment Charges, or drop the Government Land Sales reserve prices to rock bottom? That would make new properties cheaper right?

But a conversation with a realtor, plus a former executive in a development firm, cleared that innocent thought from my head. 

Consider what would happen if the government dropped land prices, and two or three lucky developers get the land for cheap.

The current market rate for new launches is around $2,100 psf. Now will the developers drop prices below this amount, because they got the land for cheaper? Or will they continue to sell at $2,100 psf anyway because that's the market rate? 

Given that developers aren't charities, and many have shareholders to answer to, the latter is more likely. Even if the government did sell land for cheaper, the developers will just sell at the current rates and reap better profits.

Besides showing why I'd be a terrible policymaker, all of this suggests that — if new launch prices fall — it will have come from somewhere besides cheaper land and development charges. 

Weekly sales roundup (Oct 30 – Nov 5)

Top 5 most expensive new sales (by project)

Top 5 cheapest new sales (by project)

Top 5 most expensive resale

Top 5 cheapest resale

Top 5 biggest winners

Top 5 biggest losers

Transaction breakdown

ALSO READ: Here's why these condos lost money despite being bought at a property market low

This article was first published in Stackedhomes.