Here's How Property Buyers' Needs Will Change This Year
PropertyGuru’s 2021 Market Outlook Report has revealed many intriguing insights into the current state of play in the Singapore property market, and how it might develop further in 2021. One key conclusion is that despite rising unemployment rates and lower-than-usual interest rates, the property sector in Singapore still shows promising prospects for both buyers and sellers alike. In fact, both the private property and HDB resale markets can be said to have exceeded expectations.
However, it is undeniable that the pandemic and the changes to working situations have caused buyers to purchase property differently in Singapore. Several other factors have also contributed to the changing buyer patterns in Singapore.
In this guide, we discuss those factors and the likely outcomes that changing buyer demand will have on the type of homes that are bought in Singapore as we continue to navigate uncharted waters in 2021.
Continued Demand from Investors and Buyers Due to Property Market Stability
In 2020, several government measures were put into place to protect buyers affected by retrenchment and/or other financial decrements. Loan repayments, temporary relief measures, waiver of extension charges and up to six months of extension for completion to developers have definitely helped to stabilise market prices and prevent panic selling. This is coupled with continued local demand for property throughout the pandemic and circuit breaker period, which has kept the market healthier than might have been expected.
Although foreign investor activity has been impacted by the pandemic and the travel restrictions and a minor exodus of expats from Singapore as foreigner employment falls, Singapore’s property market maintains a reputation as a safe and favourable ground for property investment, and we can expect this to pick up and fuel demand once more whenever vaccination becomes widespread and travel restrictions are lifted – though this may not be in 2021 or even 2022.
Working From Home Is The New Normal
Despite Singapore’s relative success in keeping the public safe, leading to many companies resuming work in their offices, many managers and workers have become accustomed to working from home, and realised that it is a viable option for conducting business. This suggests that even after the projected complete vaccination of Singapore by the end of this year, some companies and employees may never return to the office, making working from home a permanent fixture of working life here.
Working from home has brought about differing needs from homeowners who do not have homes equipped to handle such a situation. As a result, some have opted to seek bigger units, often with fewer rooms, to create the feeling of having more space for different functions within the home.
Many living rooms around Singapore have become pseudo-home offices and have had to stay that way due to the work-from-home mandate. When it comes to private and executive condominiums, the scenario has also created the need for bigger units as seen with the changing trend of buyer demand towards three-bedroom or larger units.
Changes in Location-Related Selling Points
Distance to nearby amenities
Right now, amenities have proven more important than ever. Where most buyers have always valued residential properties within walking distance to an MRT or bus stop for ease of commuting, an increase in working from home may reduce the premium placed on properties located with close proximity of such transport nodes.
Conversely, the accessibility of nearby amenities such as shopping centres, coffeeshops and food courts, supermarkets, fitness facilities or spaces, and even childcare options near to home have become more popular amongst buyers in 2020 and into 2021, as a work week spent mostly at home places new requirements on what’s available in the neighbourhood.
Quiet Neighbourhoods Over Bustling Areas
Although proximity to amenities is now increasingly valued in a work-from-home landscape, this does not means that homebuyers prefer to live too close to bustling neighbourhood centres or neighbourhood event areas. In fact, with the increased need for concentration at home now, many will be looking for quieter, more peaceful neighbourhoods, which are more conducive to a home office, as most of their time will now be spent at home instead of at the office.
Nearby Parks or Greenery Preferred
Our government’s efforts to promote environmental sustainability as part of its anti-climate change efforts has seen the encouragement of "green finance", which has led to both developers and buyers increasingly embracing the concept of green (environmentally friendly) property.
The demand for green homes, together with the toll the greenhouse effect is taking on tropical countries such as Singapore, has seen parks and other forms of greenery become a point of preference among homeowners when purchasing property in post-COVID-19 times.
This has also been reinforced by the pervasive mental and physical toll of being “stuck at home” that has come to define 2020, with its circuit breakers and lockdowns worldwide. Locally, this has led many homebuyers to choose “greener” properties, in the sense of proximity either to parks, or at least the national network of park connectors that allow for scenery, cycling or exercise to balance the sedentary nature of working from home.
More Buyers Looking to Resale Markets
Although the pandemic has not dampened consumer demand by too much, it has resulted in construction and launch delays from property developers, as the pandemic, travel restrictions, and the outbreak among our foreign workers impacted the gathering of materials and manpower for projects.
This has and will result in more home buyers turning to the immediate resale market to purchase a property instead, particularly if they have urgent needs for a home, or have made the decision not to wait any further for the property they were initially considering.
In Q4 2020, resale transactions surpassed developer sales, which is a first since Q4 2018. Read more about this in our Property Market Index Q1 2021.
Although subsequent development projects will probably have launch dates that make allowance for logistical difficulties, the resale market will continue to see some increased demand until at least the housing needs of those impacted by the initial pandemic period have been met.
How Many of These Trends will Continue into 2021 and Beyond?
Most of the above-mentioned changes to buyer needs are likely to continue at least into the first half of 2021, however, as there are many inherent uncertainties with regards to the global pandemic at hand it is difficult to tell where things will tend to in the later part of 2021 as well as early 2022. While it is certain that government measures will continue to bolster demand for the property market in Singapore, much of all else cannot be set in stone.
Buying Property in 2021?
If you’re in the market for property in the coming year, many of these considerations may be of importance to you. It’s important to search for a property that fulfils these parameters – but even more importantly, to finance what you buy, in a sustainable manner, especially given the continued economic uncertainty worldwide.
The careful planning and husbanding of your financial resources, and a good mortgage package that achieves the best outcomes without putting too heavy a strain on those resources, will be crucial as demand, and hence prices, of property in Singapore has remained stable or risen even in this climate.
To make the right moves, you should seek out expert opinions to provide an objective perspective on your goals and plans. Our experienced Home Finance Advisors at PropertyGuru Finance have not only helped countless homebuyers identify their ideal property and ownership path, they have also helped improve budget plans and most importantly, worked with all the major banks in Singapore to match the perfect mortgage plan to each person’s situation and goals.
Finding the perfect property and mortgage in 2021 can be easy, with the right market conditions and the right advice. Get in touch with us, and get started today!
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