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SINGAPORE: Private home prices in Singapore in the third quarter rose 0.8 percent from the previous quarter, while demand increased for both new development units and resale properties, analysts said which is a sign that consumer confidence is “steadily coming back” amid the COVID-19 pandemic.
The private residential property price index rose to 153.8 points in the third quarter, up from 152.6 points in the first quarter, according to real estate statistics released by the Urban Redevelopment Authority (URA) on Friday (23 de October). This is unchanged from the preliminary estimates released earlier this month.
It is also a 0.3 percent increase in the second quarter.
Rents for private residential properties fell 0.5 percent, extending a 1.2 percent decline in the prior quarter.
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“Although the pandemic has devastated economies around the world and severely affected businesses in many sectors, skies look brighter for Singapore’s real estate sector, which saw increased buyer interest and increased volume. sales, “said Christine Sun, OrangeTee & Tie’s director of research and consulting.
“Investors were looking for gems on the market while owner-occupiers were buying ‘star buy’ units launched by real estate developers,” he added.
The price increase in the third quarter was driven by a 3.7 percent increase in the landed segment, compared to a 0.1 percent increase in the ungrounded segment.
Prices for private residential non-real estate properties in the Central Central Region fell 3.8 percent, compared with a 2.7 percent increase in the previous quarter.
In the rest of the Midwest, non-real estate prices increased 2.5% after a 1.7% decline last quarter.
Prices in the Outer Midwest increased 1.7 percent after a 0.1 percent increase in the previous quarter.
“Q4 2020 buyers will be continually price sensitive, but increasingly determined, as Singapore is enthusiastically entering Phase Three (possibly late 2020), reflecting potential economic stabilization and opportunities for longer-term price appreciation, “said real estate analyst Ong Kah. Seng.
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LAUNCHES AND RECOVERY
In the third quarter, developers sold 3,517 private homes (excluding executive condos), more than double the 1,713 units sold in the previous quarter.
Between July and September, developers released 3,791 unfinished residential units, compared with 1,852 units in the second quarter.
No executive condominiums (EC) were launched in the third quarter, while 164 units of this type were purchased.
Singapore implemented a “circuit breaker” period on April 7 to slow the spread of COVID-19, allowing only essential services such as healthcare, transportation, logistics, and food and beverage outlets to continue with limited operations.
During that period, showroom visits, a critical marketing activity for real estate developers, stopped and potential buyers had to see the units virtually.
Showrooms and tours were allowed to resume during Phase 2 of the post-circuit breaker reopening, which began on June 19.
“Consumer confidence is steadily returning as more sectors of our economy reopen. Many long-term investors and wealthy buyers are on the prowl for real estate, as many are repositioning their wealth from riskier assets in light of the macroeconomic uncertainties, “said Ms Dom.
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RENTALS
Rental properties continued to take a hit in the third quarter, with prices falling 0.5 percent after a 1.2 percent drop in the previous quarter.
Real estate rentals decreased 0.1 percent, compared to a 2.3 percent decline in the prior quarter. Non-real estate rents fell 0.6 percent, compared with a 1.1 percent decline in the second quarter.
The drop in rents for landless properties was led by the Central Central Region, which fell 2.1%. Rents in the rest of the central region and outside the central region increased 0.3% and 1.0%, respectively.
Ms Sun said that rental prices may have stagnated due to rising unemployment among foreign workers during the pandemic.
He also noted that a growing number of tenants have opted for shorter leases.
“Many intend to move elsewhere if they can find cheaper housing. As the leases are now shorter, more transactions will be recorded over time,” he said.
