Private home prices in Singapore rebounded 0.3% quarter-on-quarter in the second quarter of 2020.
Private home prices in Singapore rebounded 0.3% quarter-on-quarter in the second quarter of 2020, following a 1% decline in the previous quarter, revealed the latest report from the Urban Redevelopment Authority (URA).
The report noted that landed property prices remained unchanged in Q2 2020, versus the 0.9% decrease registered in Q1 2020. Non-landed property prices, on the other hand, increased 0.4%, reversing the 1% drop posted in the previous quarter.
The Core Central Region (CCR) saw non-landed property prices increase 2.7% in Q2 2020, after falling 2.2% in Q1 2020.
Prices of non-landed properties within the Rest of Central Region (RCR) decreased 1.7%, steeper than the 0.5% drop in the previous quarter.
The Outside Central Region (OCR) posted a 0.1% increase in non-landed property prices, compared with the 0.4% decline in Q1 2020.
For the first half of 2020, overall prices dipped 0.7%, about six months after the onset of COVID-19 in Singapore.
Christine Sun, Head of Research and Consultancy at OrangeTee noted that while the price decline in 1H 2020 appears to be reminiscent of the 2008 and 1997 economic crises, “the present correction did not seem to be as severe as initially feared”.
“Comparatively the URA price index dipped 4.6% from Q2 to Q4 1996, around six months into the Asian Financial Crisis. Prices had similarly declined 8.3% from Q2 to Q4 2008 during the first six-months of the Global Financial Crisis,” she said.
She added that the COVID-19 pandemic and stricter safe distancing measures enforced during the circuit breaker period in April and May – during which show flats were closed – adversely affected private home sales in Q2 2020.
URA quarterly real estate statistics showed that the total number of transactions fell 37.6% to 2,664 units in Q2 2020, or its third consecutive quarterly drop since Q3 2019 when 5,763 units were transacted.
Transactions within the secondary market declined 55.1% to 933 units in Q2 2020, while new home sales fell 20.3% to 1,713 units.
Meanwhile, the overall rental index dropped 1.2% quarter-on-quarter and 1.1% year-on-year.
“The bulk of the rental volume seems to be renewals since new foreign ex-pats were not able to enter Singapore during the Circuit Breaker period,” said Christine.
Many tenants also chose to renew their contracts “to avoid the hassle of scouting for new housing”, while some found it hard to arrange house movers during that period.
More Singaporeans were also seen renting apartments in recent weeks. Some were singles wanting to enjoy greater privacy while others “needed a more conducive environment to work from home”.
OrangeTee believes that Singapore’s property market will continue to be propped up by domestic demand.
URA Realis data on 24 July showed that Singaporeans accounted for 80.4% of non-landed home buyers. The figure is the highest proportion achieved since Q1 2009 at 82.5%.
Despite the global lockdowns, foreign buying interest (Singapore PR and non-PR) in Singapore remained healthy.
“While the number of condos bought by foreigners slipped when compared to last year, triple-digit sales were inked last quarter as 348 units were bought by PRs and 121 units by non-PRs,” said Christine.
More than 50% (250 units) of the caveats of foreign buyers in Q2 2020 were indicated as ‘foreign unspecified’ in URA Realis. Of those that provided their nationalities, 44.3% were Mainland Chinese, 15.5% were Malaysians and 11.9% were Indians.
Given the escalating tensions and growing economic uncertainties, OrangeTee expects overall prices to drop by up to 5% this year, with about 14,500 to 16,800 private homes transacted.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email email@example.com