Private home prices in Singapore in the third quarter rose 0.8 per cent from the previous quarter, while demand surged for both new developer units and resale properties, in what analysts said is a sign that consumer confidence is “steadily returning” amid the COVID-19 pandemic.
The private residential property price index increased 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 (Oct 23). This is unchanged from the flash estimates released earlier this month.
It is also an increase from the 0.3 per cent rise in the second quarter.
Rentals of private residential properties fell 0.5 per cent, extending a 1.2 per cent decline in the previous quarter.
“Although the pandemic has ravaged economies worldwide and severely affected businesses in many sectors, the skies seem brighter for Singapore’s property sector that saw a surge of buyer interest and an uptick in sales volume,” said Ms Christine Sun, head of research and consultancy at OrangeTee & Tie.
“Investors were scouring for gems in the market while owner-occupiers were snapping up ‘star-buy’ units released by property developers,” she added.
The price increase in the third quarter was boosted by a 3.7 per cent spike in the landed segment, compared with a 0.1 increase in the non-landed segment.
Prices of non-landed private residential properties in the Core Central Region fell by 3.8 per cent, compared with a 2.7 per cent increase in the previous quarter.
In the Rest of Central Region, prices of non-landed properties rose 2.5 per cent after a 1.7 per cent decrease last quarter.
Prices in the Outside Central Region rose by 1.7 per cent after a 0.1 per cent increase in the previous quarter.
“Buyers from Q4 2020 will be continually price sensitive but increasingly more decisive, as Singapore is excitingly entering into Phase Three (possibly by end-2020), reflecting potential economic stabilisation and opportunities for longer-term price appreciation,” said property analyst Ong Kah Seng.
LAUNCHES AND TAKE-UP
In the third quarter, developers sold 3,517 private homes (excluding executive condominiums), more than double the 1,713 units sold in the previous quarter.
Between July and September, developers launched 3,791 uncompleted residential units, compared with 1,852 units in the second quarter.
No executive condominiums (ECs) were launched in the third quarter, while 164 such units were purchased.
Singapore implemented a “circuit breaker” period on Apr 7 to curb the spread of COVID-19, allowing only essential services such as healthcare, transport, logistics and food and beverage outlets to continue limited operations.
During that period, showroom viewings – a core marketing activity for property developers – were halted and potential buyers had to view the units virtually.
Showrooms and viewings were allowed to resume during Phase 2 of the post-circuit breaker reopening, which started on Jun 19.
“Consumer confidence is steadily returning as more sectors of our economy is reopening. Many long-term investors and wealthy buyers are on the prowl for real estate properties as many are repositioning their wealth from riskier assets in light of the macroeconomic uncertainties,” said Ms Sun.
Rental properties continued to take a hit in the third quarter, with prices dropping 0.5 per cent after a 1.2 per cent decline in the previous quarter.
Rentals of landed properties decreased by 0.1 per cent, compared with the 2.3 per cent decrease in the previous quarter. Non-landed rentals fell by 0.6 per cent, compared with the 1.1 per cent decline in the second quarter.
The drop in the rentals of non-landed properties was led by the Core Central Region, which fell by 2.1 per cent. Rentals in the Rest of Central Region and Outside Central Region rose 0.3 per cent and 1.0 per cent respectively.
Ms Sun said that the rental prices may have stalled because of rising unemployment among foreign workers during the pandemic.
She also noted that a growing number of tenants have been opting for shorter leases.
“Many have the intention of moving elsewhere if they manage to find cheaper accommodation. As leases are now shorter, there will be more transactions recorded over time,” she said.