The protracted downtrend in Singapore’s property market is expected to end in 2018, with home prices set to double by 2030, Morgan Stanley said in a note.

“Property market bears expect slower population growth, an ageing population, and a structural growth slowdown to weigh on the long-term property market outlook,” the note said. “We disagree and believe home prices will double by 2030.”

That implies a 5 to 6 percent increase per annum.

The city-state’s housing prices surged more than 60 percent from 2009 through 2013, driven by low global interest rates and quantitative easing in developed economies, even as the government introduced a series of cooling measures from 2011.

But in early March, the government rolled back some of the curbs, including lowering the seller’s stamp duty and shortening the minimum holding period to avoid it.

Morgan Stanley said that was a signal the property market was closer to the bottom, which should improve buyer sentiment.

There were signs buyer sentiment has already picked up: One recent launch, Park Place Residences, sold its entire phase one, initially set at 40 percent of the 429-unit total before being raised to 50 percent, within a day.

The bank expected sales volume would surge this year, with the increases in transaction volumes to spur prices higher next year.

Supply was also set to decline, the bank noted. From 2014-16, private residential supply added around 20,000 units a year, twice the historical average since 1990, it noted. But in 2017-18, supply levels were set to fall 40 percent each year, it said.

While property bears were pointing to an aging population, Morgan Stanley noted a rising household formation rate driven by singles, and a shift toward higher-skilled foreign workers.

It estimated that by 2030, one in five Singapore households would be occupied by just one person, up from one in eight in 2010.

– CNBC