Residential sector leads investment sales in Q1

Victor KangApril 29, 2021

Private investment sales surged 156% to $4.8 billion in Q1 2021 from $1.9 billion in the previous quarter. The robust performance was led by the residential sector, which accounted for 39% or $1.8 billion of total investment sales in Q1 2021.

While Singapore’s economy has been improving, recovery across the city-state’s property segment has been uneven, with investment and residential sales outpacing other sectors in the first quarter of 2021, revealed an Edmund Tie report.

Total investment sales nearly doubled to $4.8 billion in Q1 2021 from $2.5 billion in Q4 2020, driven by the Phase 3 reopening of the economy late last year as well as the commencement of the vaccination programme shortly after.

The uptick was also reflective of the construction sector’s gradual recovery, which registered a moderate contraction of 20.2% year-on-year in Q1 2021, down from the preceding quarter’s 27.4% decline.

Edmund Tie noted that no activity was registered for the public investment sales market since no site was awarded under the public land sales programmes.

Private investment sales surged 156% to $4.8 billion in Q1 2021 from $1.9 billion in the previous quarter.

The robust performance was led by the residential sector, which accounted for 39% or $1.8 billion of total investment sales in Q1 2021.

“Timely government intervention during the worst of the pandemic last year and beyond helped kept many businesses afloat and jobs intact, which in turn supported demand for homes,” said Lam Chern Woon, Senior Director of Research and Consulting at Edmund Tie.

In Q1 2021, total private homes sales volume increased 16.9% to 8,100 units from 6,929 units in the previous quarter.

New sales led the surge as it increased 34.2% over the previous quarter with 3,493 units shifted, while the resale market registered a relatively modest quarterly uptick of 6.5%.

“Demand in the primary residential market has remained strong due to a brisk flow of new launches. Projects with good locational and site attributes have proven to be highly popular among buyers,” noted Lam.

Midtown Modern and The Reef at King’s Dock, both of which were launched in Q1 2021, posted take-up rates of 82% and 86%, respectively as at end-March.

“With the mainstream economic recovery now underway and the expectation of more launches ahead, we expect residential demand and prices to improve for the rest of the year,” said Lam.

The office sector also posted a strong performance, accounting for 34% or $1.6 billion of total investment sales.

“The office sector as a whole is expected to recover at a more gradual pace in tandem with the improving job market, which is driven by various job support and conversion schemes,” said the report, adding that office rent will likely bottom out by the end of the year.

Meanwhile, industrial transactions accounted for 19% of total investment sales, while retail and shophouse transactions, made up 5% and 3%, respectively.

No investment sale was recorded for the hospitality sector in Q1 2021.

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: victorkang@propertyguru.com.sg

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