Resale transactions fell by more than 41.9% to 3,426 units in Q2 2020 from the previous quarter’s 5,893 units.
Resale prices of Housing and Development Board (HDB) flats increased 0.3% quarter-on-quarter in the second quarter of 2020, after holding flat in the previous quarter.
OrangeTee noted resale prices “have not undergone a steep correction despite the onslaught of an unprecedented global health crisis and macroeconomic shocks for more than six months”.
This comes as the four rounds of “aggressive stimulus packages unleashed by the Singapore government seem effective in preventing a housing market meltdown or property price collapse”.
The number of resale transactions, however, fell by more than 41.9% to 3,426 units in Q2 2020 from the previous quarter’s 5,893 units. On an annual basis, resale volume dropped 45.4% from Q2 2019’s 6,276 units.
Christine Sun, Head of Research and Consultancy at OrangeTee attributed the sales decline to the tighter safe distancing measures enforced during the circuit breaker and the COVID-19 pandemic.
“Even with the use of virtual home tours, augmented reality and e-open houses, some buyers face difficulty overcoming the psychological barrier of sealing the deal without first inspecting the unit in person,” she said.
In Q2 2020, the number of approved applications to rent out HDB flats declined 9.1% to 10,539 units from 11,591 units in Q1 2020. On a yearly basis, the number of approved applications in Q2 2020 was down 14.6% from the 11,775 units in Q1 2019.
Despite the generally subdued market sentiment, OrangeTee expects demand to return to some normalcy over the coming months since house viewings have resumed fully.
“Market confidence is returning gradually since the COVID situation has stabilised in Singapore. In light of the current macroeconomic uncertainties, we estimate that the total resale transactions for 2020 may be lower than last year at around 18,000 to 20,000 units,” she said.
“At this juncture, a significant price correction is rather remote unless the global health crisis spirals out of control and our unemployment number creeps up significantly.”
But with many HDB flats reaching their five-year Minimum Occupation Period, a supply overhang may continue to exert downward pressure on prices.
“The overall resale price could range between -2% and 1% this year,” she said.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email firstname.lastname@example.org