Transaction volume for private homes spiked 164.5% to 7,047 units in Q3 2020 from 2,664 units in Q2 2020, with resale homes accounting for a larger proportion of the total sales.
The skies seem brighter for Singapore’s private residential market which witnessed a surge in buyer interest as well as a hike in sales volume during the third quarter of 2020.
Urban Redevelopment Authority (URA) data released on Friday (23 October) showed that private home prices rose 0.8% quarter-on-quarter in Q3 2020, following a 0.3% rebound in the previous quarter.
The price hike was mainly driven by the Rest of Central Region (RCR) which increased 2.5% quarter-on-quarter, followed by the Outside of Central Region (OCR) at 1.7%.
“Prices were also boosted by the landed segment which saw a spike in demand and a price increase of 3.7% amid the health crisis,” said Christine Sun, Head of Research and Consultancy at OrangeTee and Tie.
Excluding executive condominiums (ECs), transaction volume for private homes spiked 164.5% to 7,047 units in Q3 2020 from 2,664 units in Q2 2020.
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Sun noted that investor exuberance for real estate properties appears “to have split over from the primary market to the secondary market”.
The new sales volume soared 105.3% quarter-on-quarter to 3,517 units in Q3 2020, while the resale market posted a steeper quarter-on-quarter hike of 271.6% to 3,467 units.
In fact, resale homes accounted for a larger proportion of total sales in Q3 2020 at 49.2%, up from 35% in Q2 2020.
Meanwhile, the COVID-19 pandemic and increasing unemployment among foreign workers stalled the rental price growth.
The overall rental index declined 0.5% quarter-on-quarter and 1.7% year-on-year , while occupancy rates dropped to 93.8% in Q3 2020 from 94.6% in Q2 2020.
Sun also noted that more Singaporeans are recently renting homes, since some “prefer the privacy and convenience of living apart from their families, especially with more people working from home”.
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She added that a growing number of tenants are taking shorter leases as they intend to move elsewhere should they find cheaper accommodation.
“As leases are now shorter, there will be more transactions recorded over time,” she said.
Looking ahead, OrangeTee and Tie expects home prices to continue to stabilise, “trending between a narrow range of between -1 and 1% for the full year of 2020”.
It expects around 2,000 to 2,500 new homes to be sold in Q4 2020 and around 8,500 to 9,500 new units this year, down from last year’s 9,912 units.