- Published on
Singapore implemented a circuit breaker period on Apr 7 to contain the spread of COVID-19, during that period, showroom viewings - a core marketing activity for property development - were halted and potential buyers had to view the units virtually. Showroom viewings were only allowed to resume on Jun 19 after Singapore entered into Phase 2 of its post-circuit breaker reopening, with capacity limitations.
Supply of private residential housing from confirmed sites under the government land sales (GLS) programme for 2nd half of 2020 has been reduced to take into account the fallout from the global Covid-19 situation, the Ministry of National Development (MND) announced on Wednesday - 24 June 2020.
Together, the three sites can yield about 1,370 units, including 615 executive condominium units. The total number of homes that can be developed, however, is nearly 23 per cent less than the 1,775 units under the confimed list in the GLS programme for the first half of the year.
This is also the lowest number since the second half of 2009 during the global financial crisis when no confirmed list sites were released.
Supply of private residential housing from confirmed sites under the government land sales (GLS) programme for 2nd half of 2020 has been reduced to take into account the fallout from the global Covid-19 situation, the Ministry of National Development (MND) announced on Wednesday - 24 June 2020.
Together, the three sites can yield about 1,370 units, including 615 executive condominium units. The total number of homes that can be developed, however, is nearly 23 per cent less than the 1,775 units under the confimed list in the GLS programme for the first half of the year.
This is also the lowest number since the second half of 2009 during the global financial crisis when no confirmed list sites were released.
The GLS plot at Northumberland Road may house 385 units
MND noted that it has not introduced any new sites for predominantly commercial or hotel use given the economic contraction and uncertain business outlook resulting from the pandemic. As to residential supply, MND said it had "to calibrate the reduction carefully to avoid potential supply shortfalls over the medium to longer-term".
MND said they have maintained a good selection of sites with additional supply in the reserve list that developers can initiate for development if they assess that there is demand and has provided a "moderate supply" in the confirmed list this time round, as the number of the unsold inventory of private housing units has declined by a cumulative 20 per cent between the first half of 2019 and this year.
The three sites as shown below will be launched in the last quarter of this year and have a longer tender period of six months to allow developers more time to make their assessment in view of the ongoing COVID-19 situation.
MND said they have maintained a good selection of sites with additional supply in the reserve list that developers can initiate for development if they assess that there is demand and has provided a "moderate supply" in the confirmed list this time round, as the number of the unsold inventory of private housing units has declined by a cumulative 20 per cent between the first half of 2019 and this year.
The three sites as shown below will be launched in the last quarter of this year and have a longer tender period of six months to allow developers more time to make their assessment in view of the ongoing COVID-19 situation.
Forett at Bukit Timah condo along Toh Tuck Road, in District 21 near PIE and short walk to Beauty World MRT station, The Rail Mall, Beauty World Centre and Bukit Timah Shopping Centre. Forett at Bukit Timah is also near Pei Hwa Presbyterian Primary, NUS High School, Nan Hua High School & Ngee Ann Polytechnic.
The confirmed list consists of three private residential sites - including one executive condominium (EC) site that can yield 615 units - have been added to the confirmed list of the Government Land Sales (GLS) Programme for the second half of 2020. Therefore, together with eight reserve list sites that can accommodate another 5,300 residential units, the total potential supply of private housing for the second half of this year comes to 6,670 units, slightly more than the 6,490 units under the GLS programme for the first half-year.
Moderate-size projects have digestible development costs (including construction costs) for developers and the new project will have sufficient residential volume to result in resident and project vibrancy - and will be even more attractive for developers to focus on amid this crisis.
Moderate-size projects have digestible development costs (including construction costs) for developers and the new project will have sufficient residential volume to result in resident and project vibrancy - and will be even more attractive for developers to focus on amid this crisis.
The Ang Mo Kio GLS site is estimated to yield 370 units
Experts feel that while a lowered housing supply could lead to higher prices in theory, but given the current market headwinds, the cloudy economic outlook, a heightened level of uncertainty, and a pandemic with no end in sight will exert pressure on prices. Buyers also remain price sensitive, perhaps more so in the current economic climate. Developers would be well aware of these factors and are unlikely to be overly bullish with their land bids.
3rd site on the confirmed list is for an executive condominium at Tengah Garden Walk, expected to yield 615 units
In total, there will be nine sites on the reserve list. They comprise five private residential sites (including one EC site), three White sites and one hotel site. All but one of the housing site were carried over from the GLS programme for the first half of the year. Together, the sites on the reserve list can yield about 5,300 units, including 590 EC homes, 100,000 sq m gross floor area of commercial space and 1,070 hotel rooms. A site on the reserve list will only be triggered for sale if a developer's indicated minimum price in his application is acceptable to the government.
- Published on
Perched atop the verdant Pearl's Hill City Park, One Pearl Bank is set to be the tallest residential development in the Outram-Chinatown district in Central Singapore. Click to find out more about our latest promotions.
The Circuit Breaker (7 to 30 April) posed initial challenges to buyers, sellers and agents as physical viewing was disallowed. There was even talk in the market that there may be no sales at all in the worst case! The worst developer sales performance on record was in January 2009 where an estimated 108 units were sold. Everyone was bracing for the worst.
In the monthly update by URA, the property market confounded all expectations by turning in an exceptional performance in April 2020. Developers sold an estimated 277 units in April and almost 100 units via virtual viewing from 7 to 30 April.
There were still naysayers who believed the worst in the economy is yet to come with a deeper recession and more unemployment. They further predict that sales volume will fall in May 2020 as the circuit breaker and physical viewing was extended to 1 June.
In the monthly update by URA, the property market confounded all expectations by turning in an exceptional performance in April 2020. Developers sold an estimated 277 units in April and almost 100 units via virtual viewing from 7 to 30 April.
There were still naysayers who believed the worst in the economy is yet to come with a deeper recession and more unemployment. They further predict that sales volume will fall in May 2020 as the circuit breaker and physical viewing was extended to 1 June.
Figure 1: Monthly Developer Launches and Sales
How did the market do?
Huttons did an analysis of developer sales based on caveats downloaded on 8 June 2020. Again, the property market never failed to surprise us with its strength and resilience. Developers sold an estimated 484 units in May 2020, an eye-popping 75% higher than April’s sales. Before the circuit breaker, developer sales have exceeded launches for six consecutive months. We believe it will be the case of sales exceeding launches in May, reflecting the depth of demand in the market.
Why did people continue to buy properties amidst the uncertainties?
Firstly, we think there is a shift in buying behaviour. While property is a big-ticket purchase, the one-month circuit breaker in April has made people accustomed to buying things online. Without this shift in buying behaviour, online sales of property will be very challenging. There were many examples of buyers who commit to a purchase in May 2020 without even viewing the show gallery.
Secondly, the high savings rate of residents is a boon in this uncertain time and it has given asset purchases like properties a boost. M2 deposits in Singapore has risen by almost S$80 billion or 13% over a period of 15 months.
Huttons did an analysis of developer sales based on caveats downloaded on 8 June 2020. Again, the property market never failed to surprise us with its strength and resilience. Developers sold an estimated 484 units in May 2020, an eye-popping 75% higher than April’s sales. Before the circuit breaker, developer sales have exceeded launches for six consecutive months. We believe it will be the case of sales exceeding launches in May, reflecting the depth of demand in the market.
Why did people continue to buy properties amidst the uncertainties?
Firstly, we think there is a shift in buying behaviour. While property is a big-ticket purchase, the one-month circuit breaker in April has made people accustomed to buying things online. Without this shift in buying behaviour, online sales of property will be very challenging. There were many examples of buyers who commit to a purchase in May 2020 without even viewing the show gallery.
Secondly, the high savings rate of residents is a boon in this uncertain time and it has given asset purchases like properties a boost. M2 deposits in Singapore has risen by almost S$80 billion or 13% over a period of 15 months.
Figure 2: M2 Deposits in Singapore (DBU)
Thirdly, resident unemployment rate has stayed low at 3.3% (March 2020). The Government has rolled out an estimated $23.5 billion (Straits Times, 26 May 2020) to support local jobs. If jobs and income are preserved, it means that demand for consumer and investment goods are intact. This will put Singapore in a good position to emerge stronger from the pandemic.
Lastly, it is a bit counter-intuitive but Covid-19 actually jolted some buyers to actively plan for their future. The uncertainties over income and employment were a wake-up call that the road to financial freedom lies elsewhere. Safer and stable assets like properties were preferred over the volatile stock market.
Huttons Asia's real estate professional - Kiwi Lim said that the government has also raised the awareness that construction costs are going to increase by around 5% to 7% in the near future due to Covid measures in place at construction sites and higher cost of construction materials. This will mean that developers will not be able to give more discounts now and some may need to even transfer the higher costs to buyers in future.
Taken in totality, this shows that buyers are ignoring the short-term uncertainties caused by Covid-19 and buying into the long-term fundamentals of Singapore, reflecting a resilient property market! The buying momentum had continued into June 2020. Developers sold around 130 units in the first week of June. Which are the top selling projects in the first week of June? Follow us on our next issue.
Lastly, it is a bit counter-intuitive but Covid-19 actually jolted some buyers to actively plan for their future. The uncertainties over income and employment were a wake-up call that the road to financial freedom lies elsewhere. Safer and stable assets like properties were preferred over the volatile stock market.
Huttons Asia's real estate professional - Kiwi Lim said that the government has also raised the awareness that construction costs are going to increase by around 5% to 7% in the near future due to Covid measures in place at construction sites and higher cost of construction materials. This will mean that developers will not be able to give more discounts now and some may need to even transfer the higher costs to buyers in future.
Taken in totality, this shows that buyers are ignoring the short-term uncertainties caused by Covid-19 and buying into the long-term fundamentals of Singapore, reflecting a resilient property market! The buying momentum had continued into June 2020. Developers sold around 130 units in the first week of June. Which are the top selling projects in the first week of June? Follow us on our next issue.
