Singapore entered into Phase 2 of the easing of the Circuit Breaker on 19 June 2020 with new condominium show flats re-opening for visitors. This resulted in 998 units excluding Executive Condominiums (ECs) sold for the month of June. This is an increase of 105% over the sales for the month of May, which recorded sales of 487 units. If you include the 33 units of ECs sold, the total number of units sold would be 1031, an increase of 25% over June 2019.
This is the highest number of units sold for the month of June since 2013 and this seems to indicate the resilience of Singapore's Property market despite the on-going pandemic and the absence of major new project launches. New units booked in June 2020 saw an increase of 21.6% from the 821 units sold in June 2019.
As Singapore is facing its worst recession since independence, the question remains “Is Singapore's Property market heading for a rebound?” The answer is not crystal clear as some buyers are not affected by the recession yet. Sectors such as IT and the Civil Service have yet to feel the effects of the pandemic. Also, developers are dangling attractive discounts to encourage sales and then there’s the current low interest rates from banks which make borrowing very attractive.
According to URA data, for the first half of 2020, there were 3,911 units transacted, a drop of 6.6% compared to 2019. 597 new units were launched for sale in June this year, which is down from the 615 units launched in May. Compared to the June 2019 number of new units launched, this is a drop of 73 units or a decline of 11%.
The majority of the units sold last month were transacted at a median price of $1,000 psf to $2,000 psf. These units are from projects that were launched earlier and they are mainly mass-market homes in the Outside Central Region (OCR). The OCR market is generally more affordable and there’s always strong demand from HDB upgraders.
OCR (outside central region) posted a 4.2% increase over the first quarter, while RCR (rest of central region) and CCR (core central region) suffered declines of 10.7% and 60.4% respectively.
Top 10 selling projects in June 2020
The strong sales in June may encourage developers to launch more projects in the coming months and these include Forett at Bukit Timah which has 633 units, the 566-unit Penrose in Sims Drive and The Clavon, located at Clementi Avenue 1 which has 640 units. There was also interest from overseas buyers returning to the Singapore market. According to URA Realis data, overseas buyers snapped up 49 non-landed homes last month, up from 33 units a year ago, while permanent residents purchased 120 units, up from 86 units a year ago.
The data also showed that the number of private homes transacted at $2 million and above rose to 129 units last month from 23 units in May. These units are mainly in the Core Central Region (CCR) where Kopar at Newton sold 25 units, Martin Modern sold 8 units and Leedon Heights sold 6 units. In the ultra luxury segment, 15 Holland Hill sold two units for $7.7 million and $15 million respectively while Boulevard 88 sold two units for $6.3 million and $10.2 million respectively.
Despite the recent uptrend, analysts warned that total transactions this year could still be lower than that of last year. As the Singapore economy contracted 41.2% in the second quarter from the previous three months, we are in a technical recession. Industry experts warned that the sales momentum may slow down as job loss increases and the recession realities sink in. There are still genuine buyers out there, unaffected by the recession and in good financial standing, taking advantage of the low interest rates to purchase reasonably priced units.
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