The PropertyGuru Singapore Property Market Index Report Q3 2020 examines what played out in the sector during an unprecedented second quarter of the year, identifying key trends that are unfolding as we enter the third quarter, marked by the opening up of the economy and a well-managed health crisis.
Due to the stringent circuit breaker measures that put a pause on most of Singapore's economy, the quarter was off to a slow start. However, when showflats reopened in June, there was a market rebound likely caused by pent up demand. According to the PropertyGuru Property Market Index Q3 2020, the quarter eventually closed with a slight gain, registering a 2.15% increase to 111.9 points.
There was a relatively higher proportion of new launch condominiums sold in the quarter, as many expect the economy to recover by 2022 to 2023, when most of these projects are slated for completion.
These trends align with the Urban Redevelopment Authority's (URA) data, which noted a 0.3% price increase in the private residential market despite earlier estimates of a 1.1% fall in the property price index.
Additionally, during the same time, PropertyGuru's Supply Index saw a record-high 46.39% increase. This was driven by a large pool of sellers in the resale market who are keen to let go of their properties.
“The rebound in prices broadly signifies that the government’s temporary relief measures have done their job in shoring up consumer confidence and prevented a panic selling situation from developing in the property market,” says Dr Tan Tee Khoon, Country Manager, Singapore, at PropertyGuru.
Diving deeper into district-level price indices, it is interesting to note that only seven out of 28 districts, namely 8, 9, 10, 13, 17, 22 and 28, recorded a decline in property prices over the second quarter.
The PropertyGuru Property Market Index Q3 2020 report examines the observed trends in greater detail and distils key insights and likely better performing regions in the second half of 2020.
Or, read our insights on the property price and supply indices and the top performing districts and projects of the quarter.
The Guru View:
Key findings of the Property Market Index Q3 2020
Here is an overview of noteworthy trends in the Singapore property market:
1. We Observed A Slight Growth in Property Asking Prices
- In the quarter, the asking prices in the non-landed private residential sector saw a surprising increase despite a significantly higher number of listings on PropertyGuru.
2. There Were More New Launches Than Resale Condos Sold
- A higher than usual proportion of new launches sold in the quarter could have contributed to the marginal increase in the price index.
- New launches continue to be favoured in the current market as the majority of investors feel that by 2022 to 2023, when the majority of launches are slated to be completed, the global economy will be back on track and the COVID-19 situation, under control.
3. MRT-Accessibility Remained A Key Priority
- Seven out of 10 condos were located within a 10-minute walk to the MRT station, indicating that buyers continue to place high emphasis on the transport- accessibility to a property.
- Six out of the top 10 best-selling projects in the quarter were also launched prior to 2019.
4. Buyers Prefer Larger Developments and More Spacious Units
- Large developments that typically have larger plots of land and more comprehensive facilities made up most of the top 10 bestselling projects in the quarter.
- On the ground, it was also observed that buyers prefer more spacious units, likely due to the expectation that the work from home culture is set to stay for the longer term.
- This aligns with the findings of PropertyGuru's Consumer Sentiment Study H2 2020, where 33% of the respondents indicated a preference for bigger layouts.
5. Investors Are Likely To Continue Buying Property
- On the investor front, we expect an increase in demand for less volatile assets like properties in H2 2020. This is a common trend during economic slumps when interest rates are low and consumers are tight with their money.
What Can We Expect Ahead?
With low fatality rates among COVID patients in Singapore, and the controlled spread among the community as we have observed so far since Phase 2, it appears that the worst is over, at least locally.
As the world inches closer towards the discovery of a vaccine, our government stimulus that is working its way throughout the financial system appears to be working well in mitigating the impact on the general economy.
We are hopeful that with the rapid re-skilling of the labour force currently underway, residents’ jobs and incomes will not have to suffer once the stimulus effects wane.
However, with the unwavering resolve of the government to sustain businesses and employability, and a strong healthcare system and track record that provides peace of mind for both the local population and foreign investors alike, it is highly likely that Singapore will emerge through this crisis with one of the least contractions around the globe and attract even more foreign investors to our shores.
- Although we expect higher price elasticity among resale property owners in the second half of 2020, large discounts are unlikely to surface in new launches market en-masse as transaction volumes recover and developers are given a reprieve with the temporary relief measures.
- Furthermore, the record volume of flats reaching MOP within the next two years should provide the private market with a steady stream of HDB upgraders taking advantage of this window of opportunity amidst low interest rates to upgrade.
- Investors and property owners can take heart that even if a worst-case scenario pans out in the property market, minor tweaks to the present cooling measures will very quickly reinvigorate the markets back with fervour.
Perhaps, before we even know it, the showflat queues will be back again.
View Our Past Property Market Index Reports from 2020
Article • May 2020
Article • February 2020
With thanks to Stuart Chng for his contributions to this report - Stuart is the Senior Associate Executive Director of OrangeTee & Tie, a renowned leader in the real estate industry and co-founder of Navis Living Group.