Residential market sentiment to weaken amid restrictive containment measures

Victor Kang20 Apr 2020

Five bedroom demo unit at JadeScape crop

After the residential market showed signs of slowing in the first quarter of 2020, Knight Frank expects market sentiment to weaken amid concerns over job security as well as restrictive containment measures due to Covid-19.

Urban Redevelopment Authority (URA) flash estimates showed that the Property Price Index (PPI) of non-landed private residential properties dropped 1% quarter-on-quarter in the first quarter of 2020, reversing the 1.9% hike registered in 2019.

Excluding executive condominiums (ECs), primary sales of non-landed properties fell 8.4% quarter-on-quarter to 2,115 units in Q1 2020, while sub-sales declined 25.3% quarter-on-quarter to 1,507 units.

Singapore’s private home market was initially resilient against the downward pressure caused by Covid-19, with sales increasing January and February increasing 29% and 67% year-on-year to 1,142 units and 1,399 units, respectively.

“The outbreak was initially largely contained in China, with the general perception that it will subside by June using the SARs outbreak as a guide,” said Knight Frank.

“However, the spread of the outbreak in the United States and Europe, and the hike in cases in March, impacted sales after social distancing measures adversely impacted on sentiments.”

March sales volume dropped 32.9% year-on-year to 1,081 units.

The Core Central Region (CCR) saw the PPI for non-landed homes decline 15% quarter-on-quarter in Q1 2020, extending the 2.8% quarter-on-quarter drop seen in Q4 2019.

With 958 units sold in Q1 2020, transactions volumes rose 6.2% quarter-on-quarter and 70.8% year-on-year. Primary sales, which increased 47.2%, led the hike as most of the new launches during the quarter were located in the CCR.

The M recorded the highest number of units sold at 389 units. This comes as buyers were drawn to the project’s attractive pricing and location. Units were transacted at an average price of $1.35 million.

A condominium unit at Boulevard 88 emerged as the most expensive caveated primary sale within the region at $10.4 million or S$3,744 per sq ft (psf).

Read: The URA Caveat: Why It’s So Irresistibly Good

The Outside Central Region (OCR) also saw the PPI drop 1% quarter-on-quarter in Q1 2020, while transaction volumes fell 23.6% quarter-on-quarter to 1,498 units.

Parc Clematis, which shifted 92 units during the period under review, posted the top transaction value in the region as a unit was sold for nearly $2.8 million or $1,624 psf.

Prices within the Rest of the Central Region (RCR) emerged as the most resilient, with the PPI for non-landed homes declining by just 0.5% quarter-on-quarter, while transactions volumes fell by around 20.3% quarter-on-quarter to 1,166 units.

Jadescape recorded the highest sales volume, with caveats lodged for 173 units at $1,708 psf. The project was launched in September 2018 and has since sold around 60% of its units.

The most expensive caveated primary sale within the region was a condominium unit at Amber Park, which was sold at $5.6 million or $2,415 psf.

“With the restrictions on show-flats with the social-distancing measures and reduced viewings, we anticipate the transaction volume to decrease,” said the property consultancy.

But despite the outbreak, Knight Frank does not expect prices in the primary market to decline as most developers have the reserves to get it through this period.

Prices in the secondary market, on the other hand, will likely be subjected to greater downward pressure as companies undertake cost-cutting measures.

“Despite the Covid-19 outbreak, there is still keen interest in choice properties that are attractively priced, and we expect transactions to resume when some of the social distancing measures are lifted,” said Linda Chern, Head of Residential (Prime Sales & Leasing, Project Marketing) at Knight Frank.

“That said, there is a growing mismatch in price expectations between buyers and sellers and transactions will take longer to proceed.”

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email


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