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Huge pent up demand for residential property in Singapore saw buyers defying effects of Covid-19 circuit breaker measures and a recession to snap up private properties (new and resale).
Urban Redevelopment Authority (URA) on Friday (July 24) released final data reports that private home prices in Singapore edged up 0.3 per cent in the second quarter from the previous three months bucking the initial prediction from URA's flash estimate released on July 1 of a possible 1.1 per cent drop during 2nd quarter.
But analysts warned that a market recovery is far from certain as business closures, salary cuts and job losses will eventually take their toll in the months ahead. "This surprising turnaround was mainly due to pent-up demand in the later half of June as showflats were opened – with safe distancing precautions – as well as viewings being allowed under stringent conditions," said Mr Leonard Tay, head of research, Knight Frank Singapore.
For the first half of 2020, overall prices of private home dipped 0.7 per cent, a very mild decline considering the unprecedented pandemic and economic disruption," he noted. Developers launched 1,852 uncompleted private residential units excluding executive condominiums (ECs) for sale in Q2 2020, compared with 2,093 units in the previous quarter and sold 1,713 units (excluding ECs) in Q2, 20.3 per cent less than the 2,149 units taken up in the previous quarter.
To know why residential properties in Singapore remain resilient despite Covid, you may read the news analysis article here.
Urban Redevelopment Authority (URA) on Friday (July 24) released final data reports that private home prices in Singapore edged up 0.3 per cent in the second quarter from the previous three months bucking the initial prediction from URA's flash estimate released on July 1 of a possible 1.1 per cent drop during 2nd quarter.
But analysts warned that a market recovery is far from certain as business closures, salary cuts and job losses will eventually take their toll in the months ahead. "This surprising turnaround was mainly due to pent-up demand in the later half of June as showflats were opened – with safe distancing precautions – as well as viewings being allowed under stringent conditions," said Mr Leonard Tay, head of research, Knight Frank Singapore.
For the first half of 2020, overall prices of private home dipped 0.7 per cent, a very mild decline considering the unprecedented pandemic and economic disruption," he noted. Developers launched 1,852 uncompleted private residential units excluding executive condominiums (ECs) for sale in Q2 2020, compared with 2,093 units in the previous quarter and sold 1,713 units (excluding ECs) in Q2, 20.3 per cent less than the 2,149 units taken up in the previous quarter.
To know why residential properties in Singapore remain resilient despite Covid, you may read the news analysis article here.
Prices of new launch condos are increasing all across Singapore in spite of Covid pandemic as supply of new condos are expected to reduce in the near future. Even Parc Esta recently just increased its prices.
Seventeen new residential projects with a total of 5,243 units will be ready for launch in the next 6 to 9 months with about three quarters of these units located in the prime or core central region, which is a significantly higher proportion than that launched in 2019. Last year, 54.7 per cent of the units launched were in the core central region. This would contribute to a higher percentage of more expensive properties being transacted in the primary market, and help support prices.
For the second quarter, prices of non-landed properties rose 0.4 per cent from the previous three months, compared with the 1 per cent drop in the previous quarter.
Giving a breakdown by region, the URA said that prices of non-landed properties in the core central region jumped 2.7 per cent in Q2, compared with the 2.2 per cent drop in the previous quarter. Prices of non-landed properties in the city fringe or rest of central region fell 1.7 per cent, compared with the 0.5 per cent fall in the previous quarter.
Prices in the suburbs or outside central region edged up 0.1 per cent, compared with the 0.4 per cent fall in the previous quarter while prices of landed properties remained unchanged in the second quarter of this year, after dipping 0.9 per cent in the first quarter.
To find out how COVID affects home buyer's decision making process when choosing their dream home, you may read the news analysis article here.
For the second quarter, prices of non-landed properties rose 0.4 per cent from the previous three months, compared with the 1 per cent drop in the previous quarter.
Giving a breakdown by region, the URA said that prices of non-landed properties in the core central region jumped 2.7 per cent in Q2, compared with the 2.2 per cent drop in the previous quarter. Prices of non-landed properties in the city fringe or rest of central region fell 1.7 per cent, compared with the 0.5 per cent fall in the previous quarter.
Prices in the suburbs or outside central region edged up 0.1 per cent, compared with the 0.4 per cent fall in the previous quarter while prices of landed properties remained unchanged in the second quarter of this year, after dipping 0.9 per cent in the first quarter.
To find out how COVID affects home buyer's decision making process when choosing their dream home, you may read the news analysis article here.
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Rental volume dipped below 20,000 in the second quarter, marking the first time since Q4 2017 that rental volume fell below 20,000 possibly due to foreigners returning to their home countries, travel restrictions and border closures. The bulk of the rental volume seems to be renewals as many tenants chose to renew their contracts, due in part to the difficulty arranging house movers.
Developers did not launch any EC units for sale in the second quarter, and sold 71 EC units in the quarter. In comparison, they launched 1,044 EC units and sold 590 EC units in the previous quarter.
As at the end of Q2, there was a total supply of 49,090 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals, compared with 48,868 units in the previous quarter. Of this number, 27,977 units or more than half remained unsold as at the end of Q2, compared with the 29,149 units in the previous quarter.
After adding the supply of 3,613 EC units in the pipeline, there were 52,703 units in the pipeline with planning approvals. Of the EC units in the pipeline, 1,899 remain unsold. In total, 29,876 units with planning approvals (including ECs) remain unsold, down from 31,099 units in the previous quarter.
"The crisis won't last forever; it will pass. So what home buyers are doing now is to prepare for the future, so that when the pandemic is finally over, they can continue their asset progression plans." said real estate professional Kiwi Lim from Huttons Asia.
Developers did not launch any EC units for sale in the second quarter, and sold 71 EC units in the quarter. In comparison, they launched 1,044 EC units and sold 590 EC units in the previous quarter.
As at the end of Q2, there was a total supply of 49,090 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals, compared with 48,868 units in the previous quarter. Of this number, 27,977 units or more than half remained unsold as at the end of Q2, compared with the 29,149 units in the previous quarter.
After adding the supply of 3,613 EC units in the pipeline, there were 52,703 units in the pipeline with planning approvals. Of the EC units in the pipeline, 1,899 remain unsold. In total, 29,876 units with planning approvals (including ECs) remain unsold, down from 31,099 units in the previous quarter.
"The crisis won't last forever; it will pass. So what home buyers are doing now is to prepare for the future, so that when the pandemic is finally over, they can continue their asset progression plans." said real estate professional Kiwi Lim from Huttons Asia.
Top selling condo projects in the market is also seeing their unsold supply of condo units dwindling.
From Straits Times article on 24 July 2020
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Property is a relatively illiquid asset class and the capital outlay is significant. Buyers must be able to ride out market downturns, and for those able to do so, the returns have proven to be attractive.
For instance, during the past crises, the URA's private residential property price index fell by as much as 37 per cent during the Asian Financial Crisis but rebounded by 40 per cent within six quarters. Prices are often sticky on the way down as owners hold on to asking prices until volume has dropped significantly over a period of time. On the contrary, the rebound can be swift.
For instance, during the past crises, the URA's private residential property price index fell by as much as 37 per cent during the Asian Financial Crisis but rebounded by 40 per cent within six quarters. Prices are often sticky on the way down as owners hold on to asking prices until volume has dropped significantly over a period of time. On the contrary, the rebound can be swift.
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So how should potential buyers go about their decision-making during & post COVID?
Location. The tenet for buying property has not changed - location - but with a new perspective. Where location was previously confined to the prime districts, the concept of location has evolved. Although a prime location remains desirable, lifestyle amenities - for example, proximity to the riverside or F&B amenities have also come to the fore as convenience becomes the new currency.
Following the pandemic, the pace of decentralisation of business activities, supported by a wider variety of amenities, will gain momentum as more companies adopt a hub-and-spoke model with headquarters in the CBD and branch offices in decentralised locations.
Accessibility & connectivity. Singapore has become more accessible as the MRT and bus networks and neighbouring amenities continue to expand, supported by alternative modes of transport. By 2040, Singapore will be a 45-Minute City with 20-Minute Towns. All journeys to the nearest neighbourhood centre - whether by walking, cycling or riding - will take less than 20 minutes. Some nine in 10 of these peak-hour trips will be completed within 45 minutes.
Jobs will also be closer to homes as business activities continue to decentralise. This will make living away from the city centre increasingly attractive. As MRT stations become more prevalent, properties near interchange stations will command a premium as accessibility and connectivity in terms of time (instead of physical distance) become the criteria for decision-making.
Find out why is the residential market in Singapore so resilient in spite of the COVID pandemic by reading the news analysis article here.
Location. The tenet for buying property has not changed - location - but with a new perspective. Where location was previously confined to the prime districts, the concept of location has evolved. Although a prime location remains desirable, lifestyle amenities - for example, proximity to the riverside or F&B amenities have also come to the fore as convenience becomes the new currency.
Following the pandemic, the pace of decentralisation of business activities, supported by a wider variety of amenities, will gain momentum as more companies adopt a hub-and-spoke model with headquarters in the CBD and branch offices in decentralised locations.
Accessibility & connectivity. Singapore has become more accessible as the MRT and bus networks and neighbouring amenities continue to expand, supported by alternative modes of transport. By 2040, Singapore will be a 45-Minute City with 20-Minute Towns. All journeys to the nearest neighbourhood centre - whether by walking, cycling or riding - will take less than 20 minutes. Some nine in 10 of these peak-hour trips will be completed within 45 minutes.
Jobs will also be closer to homes as business activities continue to decentralise. This will make living away from the city centre increasingly attractive. As MRT stations become more prevalent, properties near interchange stations will command a premium as accessibility and connectivity in terms of time (instead of physical distance) become the criteria for decision-making.
Find out why is the residential market in Singapore so resilient in spite of the COVID pandemic by reading the news analysis article here.
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Growth areas. As Singapore continues to decentralise, there will be new employment areas - for example, Jurong Lake District, Jurong Innovation District, Woodlands Regional Centre and Punggol Digital District, with ready accessibility to/from other activity nodes and residential areas, facilitated by the Jurong Regional Line, Thomson-East Coast Line and North East Line extension.
Neighbourhoods near learning institutes such as universities often command a premium as they anchor a cluster of knowledge-driven businesses that will in turn catalyse other activities. The presence of an institute of higher learning will also have a positive impact on the profile of the residents and amenities.
Park connectors, parks and nature reserves. Proximity to nature has a positive impact on our physical, mental and emotional health. Our 150-km Round-Island-Route which integrates with the park connectors, connects natural, cultural, historical and recreational sites, thereby creating myriad opportunities for a variety of recreational activities. More residents are exercising and taking to the outdoors. Meanwhile, Singapore's population is ageing. The current median age of 42.2 years is expected to increase to 53.4 years by 2050.
It is estimated that 12.4 per cent of our population in 2019 was 65 years and above and this will grow to 22.5 per cent in 2030 and 33.3 per cent in 2050. Even as seniors place more emphasis on outdoor activities, Covid-19 has also raised the awareness of health and wellness to a new level. As such, the demand for properties located near park connectors, parks and nature reserves will increase.
Health & wellness. This pandemic has made us rethink real estate including how space is to be used. Our homes have become our workplace, classroom, entertainment venue, exercise studio and playground. Going forward, we could find more households spending time at home.
The global trend towards a gig economy as well as more seniors working part-time is leading to a paradigm shift in the design of homes. For example, attention is now turned towards providing more light, cross ventilation, improving fresh air intake, views and creating dedicated or flexible space incorporating touchless design and technology to promote the well-being of those using the home for different activities. Indeed, the healthy building movement is gaining pace, as its role in public health becomes more apparent with practical designs that help communities lead healthy and active lifestyles both within and outside of our homes.
"I am confident the global economy, which is expected to fall into recession this year, and markets will continue to recover" says Singapore's property analyst Kiwi Lim from Huttons Asia who believes that the global economy is entering a multi-year recovery with some bumps along the way.
Private property prices increased 0.3% in 2nd Quarter of 2020 in spite of COVID pandemic. Read the news article here.
Neighbourhoods near learning institutes such as universities often command a premium as they anchor a cluster of knowledge-driven businesses that will in turn catalyse other activities. The presence of an institute of higher learning will also have a positive impact on the profile of the residents and amenities.
Park connectors, parks and nature reserves. Proximity to nature has a positive impact on our physical, mental and emotional health. Our 150-km Round-Island-Route which integrates with the park connectors, connects natural, cultural, historical and recreational sites, thereby creating myriad opportunities for a variety of recreational activities. More residents are exercising and taking to the outdoors. Meanwhile, Singapore's population is ageing. The current median age of 42.2 years is expected to increase to 53.4 years by 2050.
It is estimated that 12.4 per cent of our population in 2019 was 65 years and above and this will grow to 22.5 per cent in 2030 and 33.3 per cent in 2050. Even as seniors place more emphasis on outdoor activities, Covid-19 has also raised the awareness of health and wellness to a new level. As such, the demand for properties located near park connectors, parks and nature reserves will increase.
Health & wellness. This pandemic has made us rethink real estate including how space is to be used. Our homes have become our workplace, classroom, entertainment venue, exercise studio and playground. Going forward, we could find more households spending time at home.
The global trend towards a gig economy as well as more seniors working part-time is leading to a paradigm shift in the design of homes. For example, attention is now turned towards providing more light, cross ventilation, improving fresh air intake, views and creating dedicated or flexible space incorporating touchless design and technology to promote the well-being of those using the home for different activities. Indeed, the healthy building movement is gaining pace, as its role in public health becomes more apparent with practical designs that help communities lead healthy and active lifestyles both within and outside of our homes.
"I am confident the global economy, which is expected to fall into recession this year, and markets will continue to recover" says Singapore's property analyst Kiwi Lim from Huttons Asia who believes that the global economy is entering a multi-year recovery with some bumps along the way.
Private property prices increased 0.3% in 2nd Quarter of 2020 in spite of COVID pandemic. Read the news article here.
Above is extracted from Business Times
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The residential property market has remained remarkably resilient notwithstanding the unprecedented pandemic. Flash estimates for second-quarter 2020 showed that the Urban Redevelopment Authority's private residential property price index eased by only 1.1 per cent quarter on quarter following the one per cent decline in Q1 2020 while the HDB resale market was even more resilient - the Q2 HDB resale flat price index increased by 0.2 per cent quarter on quarter compared with steady prices in Q1.
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During the "circuit breaker" partial lockdown to contain the spread of the Covid-19 virus, developers were able to sell some units, mainly to buyers who had already visited the show galleries earlier. Response to sales of newly completed units by developers was relatively encouraging.
Interest centred mainly on Outside Central Region (OCR) (Figure 1) while the proportion of Singaporeans buying private residential properties increased to above 80 per cent in April and May, reflecting underlying confidence in the market.
To find out how COVID affects home buyer's decision making process when choosing their dream home, you may read the news analysis article here.
Interest centred mainly on Outside Central Region (OCR) (Figure 1) while the proportion of Singaporeans buying private residential properties increased to above 80 per cent in April and May, reflecting underlying confidence in the market.
To find out how COVID affects home buyer's decision making process when choosing their dream home, you may read the news analysis article here.
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Why is the residential market so resilient despite what is happening in the real economy?
Real estate professional Kiwi Lim from Huttons Asia is seeing an increase in real estate interest from overseas foreign buyers especially from Hong Kong and China eyeing Singapore properties. Just last month in June 2020, right after the circuit breaker in Singapore eases into phase 2, Singapore saw 169 purchases by foreigners, made up of 120 permanent residents (PRs) and 49 non-PRs. The previous high was in August 2019 with 188 foreign buyers.
Private property prices increased 0.3% in 2nd Quarter of 2020 in spite of COVID pandemic. Read the news article here.
- Memories of past cycles. Looking back at past crises, including the Sars public health crisis, residential prices in land-scarce Singapore have rebounded after each cycle, on one occasion by as much as 62 per cent after the 2008 global financial crisis (Figure 2). From an economic perspective, the scarcity of land appears to be a supply fundamental that can weather the erosive effect of shocks.
- High liquidity with limited investment options. For many, there are currently limited options with a wall of money trying to find an investment, gravitating them to residential properties.
- Low cost of borrowing. The cost of borrowing is at an all-time low and interest rates are expected to remain low in the near future with the current fixed rate mortgage rate of about 1.5 per cent.
- Stable asset class. Real estate is a relatively stable asset class. For instance, in Q1 2020, the URA private residential property price index fell by one per cent. This contrasts with the STI which fell by 23 per cent and property stocks by more than 20 per cent, notwithstanding that the stock market has recovered some ground since then.
- Emotional attachment. Owners often have strong emotional ties to their residential properties as it is an asset where one can physically enjoy and have the pride of ownership, a legacy which can be passed on to the next generation.
- Serious investors with longer term perspective. Macro-prudential policies introduced over the years have also weeded out speculators, leaving genuine investors who take a longer-term perspective.
- Established developers. Similarly, the many crises we have weathered have ensured that developers who survived are generally in a much better position with stronger balance sheets than before, lending stability to the market.
Real estate professional Kiwi Lim from Huttons Asia is seeing an increase in real estate interest from overseas foreign buyers especially from Hong Kong and China eyeing Singapore properties. Just last month in June 2020, right after the circuit breaker in Singapore eases into phase 2, Singapore saw 169 purchases by foreigners, made up of 120 permanent residents (PRs) and 49 non-PRs. The previous high was in August 2019 with 188 foreign buyers.
Private property prices increased 0.3% in 2nd Quarter of 2020 in spite of COVID pandemic. Read the news article here.
Above is extracted from Business Times
