Transactions sharply tapered off as the effects of the Covid-19 began to hurt sentiment reverberate through the economy.
Developers in Singapore sold 660 new private homes in March, down 32.4% from the 976 units moved in February. On an annual basis, developer sales dropped 37.4% from the 1,054 units shifted in March 2019.
Tricia Song, Head of Research for Singapore at Colliers International, said transactions sharply tapered off as the effects of the Covid-19 began to hurt sentiment and reverberate through the economy.
Including executive condominiums (ECs), developers sold 904 units in March, down 31.3% month-on-month and 14.9% year-on-year, according to the latest data released by the Urban Redevelopment Authority (URA).
There was only one mega-development launched last month – the 548-unit EC project OLA – which sold 170 units, making it the best-selling project for the month.
The 378-unit Kopar at Newton released only eight units for sale in March, while three smaller projects – 77@East Coast, 19 Nassim and Tedge – were also launched.
Aside from OLA, the other top performers for March include Jadescape (sold 76 units), Treasure at Tampines (moved 69 units) and Parc Esta (63 units sold).
New home sales in the Outside Central Region (OCR) and Rest of Central Region (RCR) – which climbed 10.6% and 7.2%, respectively – remained resilient last month “as many deals were probably near completion prior to the worsening of the Covid-19 outbreak and before stricter safe distancing measures kicked-in at the end of March”, said Christine Sun, Head of Research and Consultancy at OrangeTee & Tie.
“Some investors may have also bought properties to diversify their investment portfolios after the stock market rout in March,” she added.
Previously launched projects with lower price quantum of $1.2 million to $1.5 million accounted for most of the transactions in the city fringe and suburbs.
“Amidst economic uncertainty, buyers focused on affordability and owner-occupier properties. We estimate 89% of the total developer sales in March 2020 were priced at the median price of $1,000-$2,000 psf, compared to 55% in February,” said Song.
And given the dearth in foreign buyers last month due to stricter border control across many countries, the proportion of Singaporeans purchasing non-landed new homes increased to a fresh high of 86.3% last month since April 2009, noted Sun.
“Taking into consideration the closure of sales galleries due to circuit breaker measures and the ban on foreign visitors into Singapore, new sales volume is likely to hit a roadblock in April 2020,” said Desmond Sim, Head of Research for Southeast Asia at CBRE.
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“The injection of new units for launch is also expected to slow down, from what was originally planned at the start of the year as some developers delay their project launches. Softer economic sentiments may hold back buyers’ decision.”
Lee Sze Teck, Director of Research at Huttons Asia, also believes that new home sales in April will definitely take a hit due to the circuit breaker measures. “However, if initial first week sales are an indication of demand in the property, it gives cause for optimism,” he said.
“An estimated 150 caveats for private residential properties were lodged in the first five days of April. If this is extrapolated for the whole month, we might see 900 transactions in April which is much higher than March,” he explained.
Once the situation stabilises and the safe distancing measures are lifted, Sun expects new home sales to pick up with the reopening of show flats and resumption of house viewings.
“The growing economic uncertainties around the world may also propel more investors to seek shelter for safe-haven assets here, of which private residential properties will remain attractive to investors in the long term,” she added.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email email@example.com