Webinar Recap: Singapore Property Market in 2020 - Buy, Sell or Wait?

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How will COVID-19 impact the real estate market in Singapore? Should I even consider buying property now when I am worried about my job and income? What will change moving forward?

On Tuesday evening, over 490 guests attended PropertyGuru's webinar entitled "Singapore Property Market in 2020 - Buy, Sell or Wait?" to get expert opinions and advice on all of these questions and more.

If you missed our live webinar, you can watch it again via the video link above.

And whilst we were not able to get through all the great questions that came in throughout the session, we have worked with our expert panellists, Dr Tan Tee Khoon (Singapore Country Manager, PropertyGuru), Winston Lee (Director of Special Project, Property Guru) and Dr Nai Jia Lee (Deputy Director, National University of Singapore, Institute of Real Estate and Urban Studies), and now provided a full list Q&A list below.

Full List - Questions and Answers from the Webinar:

 

Do you think the government will reduce the price control measures they have in place?

Do you mean whether the government will adjust the property cooling measures during this pandemic? The cooling measures are put in place to ensure a sustainable property market. The government has just announced temporary relief measures for the property sector due to COVID-19 on 6 May 2020. In the press release issued by MND, the government states that she will continue to closely monitor the impact of the pandemic and adjust policies accordingly.

 

I am exploring, Kopar at Newton as the current price is good on value. But will the developer reduce the price or give a discount should the pandemic recession worsen? How do you know when is a good time to enter during a downturn market? 

In our view, it is rarely possible to time property purchase with the bottoming out of prices in the real estate market. Also, it is our view major price corrections in the property sector are unlikely given the hefty resilience packages provided by the government recently and developers are well-capitalised including ample runway for them to sell all their inventory in the 5-year timeframe. The government has just announced temporary relief measures to developers too on 6 May 2020. As such, our take is that you could consider making your purchase based on your personal requirements and the value appeal of the specific project(s) you are considering.

 

There are three regions with lower psf that are close to the city centre: Geylang, Little India and Balestier; which one do you think has more potential? 

You may wish to refer to our Property Market Outlook 2020 and Property Market Index Q2 2020 reports for our highlights of hotspots and districts to consider. 

 

Could you explain how the median psf in District 9 is less than $1000 psf? 

The median psf asking price for Orchard/River Valley (District 9) in our Property Market Index Q2 2020 is $2563.  

 

People generally say to buy in a downturn when prices are low, and sell at an upturn when prices are high - following the property market cycle. May I know:

1) What do we mean by drop in prices? Is there a general numeric psf we can peg to that? 

2) If developers hold their prices since the better times pre-COVID, to during COVID, and post-COVID. Buying at the same psf but during a downturn during COVID - does that mean I have bought rightly or wrongly?  

3) Or does it only refer buying at bargain buys? Then back to question 1), is there a numeric peg to what is a bargain buy? 

1) Our top 5 districts where there is asking price moderation is based on the listings in PropertyGuru website in Q1 2020. You can refer to pages 8-9 of our Property Market Index Q2 2020 report. 

2) Like we mentioned during the webinar, we don’t expect major price corrections in the property sector. As such, when you consider a property purchase, it would be a decision based on the value appeal of the property, its location attributes and of course if the price meets your personal budget. 

3) Different districts would have different asking prices. Asking prices could have moderated in districts such as 23 (Hillview) or 9 (Orchard/River Valley) as there were more listings (more sellers) in those locations thus sellers are more amenable to price negotiation.

 

How does one interpret GLS in terms of timeline for the buyer to plan his future purchase? Asking this in relation to developer's auctioning of land till launch

The pipeline of GLS sites has been kept steady for 1H 2020 in view of the supply overhang and as developers’ bids for land moderated after property cooling measures. The new supply for 1H 2020 consists of 3 confirmed sites and 8 reserve sites that can yield about 6490 homes of which 1775 units are in the confirmed list.

Upon award of the site assuming a developer is successful with his bid, it will take usually between 9-12 months before the developer is ready to launch the new project. There are currently about 30,000 unsold units in the market and this year we are supposed to see the launch of another 40 projects of various sizes (50% of which are in the CCR). In our view, the current overhang would be gradually absorbed by the market within 4-5 years.  

 

What is the proportion of foreign buyers versus local buyers for the past year? Do you reckon the number of foreign buyers is sufficient to support Singapore's property market? 

Close to 85% of RCR and OCR developments are bought by locals. It is only in the CCR where foreign buyership may take up to 30% of total buyers.  

 

 With the rollout of huge quantitative easing worldwide recently, coupled with record low-interest rates, how will this affect the local market? 

It means there is more liquidity in the market and borrowing cost is low. We expect buyers to use this in their favour to finance the purchase of their choice homes. 

 

The NUS survey “half of developers likely to cut prices of Singapore new launches” is a great concern to property buyers. Based on your experience and expertise, how many percentage points of drop in new sale price and resale price will entice buyers to enter into CCR / RCR / OCR? 

This is the NUS’ real estate sentiment index and not a report of developers actually slashing prices. It is our view, major price corrections in the property sector are unlikely given the hefty resilience packages provided by the government recently and developers are well-capitalised including ample runway for them to sell all their inventory in the five-year timeframe. The government has also just announced temporary relief measures to developers too on 6 May 2020. 

 

Based on the Property Market Index report, it seems that CCR is good for investment as price is on lower trend. BTW, is the data correct as the median price in district 9 is only SGD993? 

The median psf asking price for Orchard/River Valley (District 9) in our Property Market Index Q2 2020 is $2563.   

 

If we want to capture the Greater Southern Waterfront transformation, is Avenue South Residences better or Kent Ridge Hill Residences? Or do you think that there are other new launches worth considering? 

We are not able to give advice on specific projects and would appreciate if you contact any of the marketing agencies for Avenue South Residences or Kent Ridge Hill. You may read our Property Market Outlook 2020 and Property Market Index Q2 2020 reports on hotspots and top districts with asking price growth and asking price moderation.  

 

Is Hillview/Bukit Panjang priced at $1500/psf a reasonable buy? Why? 

Different districts would have different asking prices. Asking prices could have moderated in districts such as 23 (Hillview) as there were more listings (more sellers) in those locations thus sellers are more amenable to price negotiation.  

 

Are freehold condos worth the extra premium vs 99-year developments? How do they fare in 20 years time, in terms of appreciation of value?

It really depends on your purchase intention. For rental yield, there are aplenty leasehold properties which would offer the stability of rental income. If you are buying for capital appreciation and/or legacy planning, a freehold property may be a better alternative. You can read this article we published.

 

I am intending to sell my property at River Valley. I am not in a hurry to sell but do you think the price would drop further? 

Any further price correction would depend on both micro and macroeconomic factors such as unemployment rate which would impact disposable income available for investment. 

 

Does the PropertyGuru Singapore Property Supply Index reflect real supply in the market? Does it include or exclude listings of new launches which usually duplicate? 

Our supply index is based on all residential property listings on PropertyGuru website. Assuming 8 out 10 sellers appoint agents to sell their properties, it would reflect 80% of real supply in the market including new launches as all developers currently appoint agents to market their projects. 

 

The demand for commercial real estate is expected to drop significantly. Do you see that money being routed to the residential property market? 

Not necessarily. Commercial property buyers tend to be institutional players who may not take the same interest in residential properties. 

 

There is a difference of approx. 30% between new launches and existing properties in any locality, do you see that widening/narrowing henceforth? 

If this 30% in the question is a reference to the price gap between new launch and a secondary market residential property within the same location – it really depends on the age of the secondary market residential property, size and amenities.  

 

Will the Government ease the cooling measures especially the ABSD? 

The cooling measures are put in place to ensure a sustainable property market. The government has just announced temporary relief measures for the property sector due to COVID-19 on 6 May 2020. In the press release issued by MND, the government stated that they will continue to closely monitor the impact of the pandemic and adjust policies accordingly.

 

What about HDB resale trend after COVID-19? 

You may wish to read our article on HDB resale prices will not correct excessively in Property News.  

 

Does it matter if a condo is 99-years lease or freehold if it's near an MRT station? 

There is already a usual premium of between 10-15% for properties near MRT.

 

What do you see will happen with property prices in the next 6-12 months from COVID-19, will it be similar to the following months from SARS? 

The jury is not out yet for property prices in next 6-12 months though we don’t expect major price corrections. 

 

Which segment of the property market is a better buy now? Landed or condo? 

You may wish to read both our Property Market Outlook 2020 and Property Market Index Q2 2020 for hotspots and top districts where there are price growth and price moderation for your consideration.  

 

What’s the expected average non-landed rental yield in this current market? 

It could be between 2 to 3%.   

 

Now that the economy is in a bad shape, do you foresee the Govt relaxing some of the cooling measures to kick start the real estate market to give a boost to the economy? 

The cooling measures are put in place to ensure a sustainable property market. The government has just announced temporary relief measures for the property sector due to COVID-19 on 6 May 2020. In the press release issued by MND, the government stated that they will continue to closely monitor the impact of the pandemic and adjust policies accordingly.

 

Based on historical data, does the Singapore GDP have any impact on the property market?

Real estate market sentiment can be weakened on the back of lower GDP forecasts. 

 

What is the outlook of Greater Southern Waterfront properties for rental and sale? 

You may wish to read our Property Market Outlook 2020 report.   

 

Once the lockdown and travel restrictions are eased, will foreign investors start to invest in Singapore, especially in the CCR? Will this also mean that the potential capital gain will be higher? 

What it means is that the take-up rate for CCR properties will be higher but capital gain depends on your entry point in buying the CCR property. If a buyer waits till the lockdown and travel restrictions are lifted, the pent-up demand that comes thereafter may mean that the buyer enters the CCR market at a higher purchase price and thus that would impact capital gain eventually depending when that same buyer chooses to exit.  

 

With the upcoming development of the southern region, would you advise to hold on to my property in D5?

You should sell when you are able to fetch a good price with capital gain in mind and if holding your current property in view of better news coming your way that may raise your property’s market value (thus sale price), then holding is good. 

 

I would like to seek some opinions and views on Kopar and Avenue South Residence? From investment and rental point aspect. Which is more worthy to invest in? Or is there something else you will invest in? 

You may wish to read both our Property Market Outlook 2020 and Property Market Index Q2 2020 reports for hotspots and top districts where there are price growth and price moderation for your consideration. Both projects have been mentioned. 

 

Do you think foreigners would start purchasing properties in Singapore (especially neighbouring countries and the Mainland Chinese) given our advanced medical industry and having "health-security" at the back of their minds in the year ahead? 

Close to 85% of RCR and OCR developments are bought by locals. It is only in the CCR where foreign buyership may take up to 30% of total buyers. Singapore is a safe haven with sound fundamentals and established medical facilities. So properties here especially in the CCR should offer good value appeal to foreign investment. 
 

Download the PropertyGuru Property Market Index Q2 2020 report here

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