With prices hovering near historically high levels, the robust home market this year may face a softening trend in 2016.
Home prices could fall up to 15 percent next year against the backdrop of a weakening economy and growing uncertainty in the labor market, property consultancy Colliers said in a report.
Already this year, the number of transactions in residential property has been shrinking, and the mortgage departments of banks are reportedly turning cautious when valuing properties.
Despite the expected slackening in the market, a property crash remains highly unlikely given that end-users, rather than speculators, are driving the demand for housing, the report said.
Similar softness is expected for the rental market, in particular the luxury segment, which has experienced a 10 percent rise in rents this year, the biggest yearly jump since the global financial crisis in 2008.
There are two notable negative factors from the demand side — multinational companies remain cautious in hiring, and financial institutions have been cutting back on housing allowances.
On the supply front, a more sluggish home market may push owners to put their units up for lease, limiting the potential for rents to rise further.
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