SINGAPORE (Sept 16): Private home prices in Singapore could fall 15% over the next two years, arising from a “structural demand-supply shift”, says Goldman Sachs.

Following yesterday’s release of official data showing a 43% y-o-y fall in private home sales in August, Goldman’s Singapore property analysts say they expect sales to remain slow.

There are now about 7,000 private homes that have been launched but not sold, compared with 5,400 units in 1H2013 and 3,600 units in 2010, according to their estimates.

“Nonetheless, we think it is premature to discuss policy easing, given home prices are only 3% off the recent peak in 3Q2013, having risen 89% since the start of the upcycle in 2005.”

In terms of stock picks, Goldman prefers commercial property plays over residential developers. Its favourites include CapitaLand and UOL Group.

Developers sold merely 432 private homes last month, the lowest so far this year, according to the Urban Redevelopment Authority.

The result marked a 15% decline from July and a bigger 43% fall from August last year, as developers held back on launches.