According to a report published by property sales website PropertyGuru on Tuesday (Dec. 6), rising interest rates and the government's property cooling measures have put the residential market under pressure, with many buyers discouraged from buying homes and transaction volumes beginning to decline gradually.

Dr. Naijia Li, head of PropertyGuru's Real Estate Intelligence Division, who authored the report, said that with the economic slowdown and reduced domestic demand, the number of property transactions is expected to fall next year.

He predicts that prices will remain at current levels or rise slightly in the first six months of next year, as sellers still have the ability to hold on to their properties, but the situation could change dramatically if there is an unexpected shock in the weaker economy.

If the economy deteriorates significantly, some homeowners may be willing to lower their asking prices, especially if they are in financial trouble.

In addition, the government's land sales program for the second half of this year is being selected to build 3,505 condominium units on the list of lots, an increase of 26% year-on-year. The increased supply will help to curb the rising prices, although Li Naijia believes that it will take some time before it takes effect.

Prices are expected to fall, but potential buyers will still have to wait a while.

On the other hand, more first-time home buyers are renting instead because they can't afford to buy a house these days.

According to PropertyGuru's Consumer Sentiment Study, 66% of respondents switched to renting later this year because they did not have enough savings to buy a home.

Nonetheless, they believe that renting can only solve their short to medium term needs and they still want to own their own home.

Sidney Lee, Senior Research Director of Hopedorn Group, also believes that for the next year, the price of private housing will remain stable, with the price per square foot of floor area remaining at $1,300 and $1,100 for the recent government land sale program lots located outside the other Central District and Central District respectively.

However, he predicted that rising construction costs and fewer unsold units on the market could push up prices by up to 5 percent next year.

He believes that although the loan interest rate is high, but the impact on the sales of new private homes is not expected to be significant, because the loan repayment amount of new private homes will increase in stages, and the resale market will be more affected by the impact.

According to the statistics of Li Si De, there are about 40 new private residential projects coming on the market next year, with a total of 10,000 to 12,000 units.

Twenty percent of these units are in the Core Central Region (CCR) development sites. Another 50 percent are in the other central districts (RCR), while the remaining 30 percent are outside the central districts (OCR).

He predicts that projects such as 8 Shenton Way, Blossoms by the Park and Lentor Hill Residences, which will be launched in the first quarter of next year, will be of interest to buyers.

Sales are expected to range from 9,000 units to 10,000 units as more new private residential projects are launched next year.