Nearly six out of 10 people say they will not consider buying homes unless prices fall 20 per cent or more, as a rise in the supply of new flats could force developers to cut prices even more next year, says Midland Realty.
About 58 per cent of the respondents in a poll by the agency on next year's property sector outlook said they believed there was heavy downward pressure on home prices.
"The result indicates prices will be a key reason for any buying decision," Angela Wong Ching-yi, deputy chairman of the agency's locally listed owner, Midland Holdings, said yesterday.
Just 18 per cent said they believed prices had upside potential, while 48 per cent said they would sell their flats in anticipation of an imminent rise in interest rates, which could put their finances under pressure.
Wong said she expected home prices to decline 5 to 10 per cent next year as market sentiment had been severely damaged by the government's curbs. "Next year will be a bad year," she said.
Sales of older homes could fall to below 40,000 from this year's estimated 42,000 deals, Wong said, adding that that would be "the lowest in the past 19 years".
In contrast, she forecast developers would lure buyers to the primary market through discounts and low-price strategies next year. That would boost sales of new homes to 11,000 units from an estimated 9,000 this year.
Including flats, offices, shops, industrial units and car parks, Wong said property transactions next year would drop 7 per cent to 65,000.
Bearish sentiment prompted Midland Holdings to issue a profit warning on Friday, saying it expected to record a consolidated net loss for the second half of this year.