Growth momentum of Singapore private home prices expected to slow as government increases supply of residential land, says UBS, according to Dow Jones.

The research house notes government will sell 18 sites from 2H10 under its confirmed list, place another 13 sites under its reserve list, potentially yielding “a record quantum” 13,905 homes.

“The notion of record supply will impact buyer sentiment and lead to more selective purchases, thereby slowing momentum. In turn, this would limit developers’ ability to price projects aggressively,” says UBS.

While overall home prices +6% year-to-date, UBS says prices of mass-, mid-market projects could correct by 5% in 2H10, adding if prices continue to rise sharply, draconian measures may be introduced. “Either way, there is little price momentum.”

Prefers Singapore REITs, office landlords to residential developers. FTSE ST Real Estate Holding & Development Index off 2.0%, STI off 1.7%.