Singapore implemented a slew of circuit breaker measures from 07 April 2020 to curb the spread of the Covid-19 infection within the community. The elevated set of strict distancing measures include the closure of show flats and discontinuation of house viewings.
The movement restrictions adversely impacted the property market and new sales declined significantly in April. According to the developers’ sales survey by the Urban Redevelopment Authority, new home sales dipped 58.0 percent month-on-month (m-o-m) from 660 units in March to 277 units in April. Compared to the same period last year, the number of sales transactions declined by 62.4 percent year-on-year (y-o-y). The previous low was in December 2014 when 230 units were sold. The lowest sales volume since URA started releasing records in June 2007 was 108 units sold in January 2009. This coincided with the Global Financial Crisis when sales volume remained persistently low below 200 units for many months (see table below).
Including executive condominium (EC) units, developers sold 293 units, a 67.6 percent decrease when compared to the 904 transactions in March this year. Of this number, 65.5 percent or 192 units were transacted before the Circuit Breaker Measures kicked in.
Slightly more than a third (36.8 percent of 277units) or 102 new home sales were from the Core Central Region (CCR). The highest-priced private home transacted last month was a super-luxury condominium (477 sqm) at 15 Holland Hill for S$13.8 million or $2,692 psf on 02 April 2020. This is the third priciest new condominium unit transacted over the past 12 months. The other two higher-priced units were from Boulevard 88 that were sold in May and June 2019 for $28 and $31 million respectively.
According to URA Realis data, a number of luxury projects continued to move units after the circuit breaker measures were implemented, including Boulevard 88, Midtown Bay, Van Holland, Kopar at Newton and Neu at Novena. Two super-luxury condominiums at Boulevard 88 were sold for more than S$10 million each. Both were 7th-floor units (257 and 258 sqm) transacted on 14 April 2020 for S$10.3 million each at S$3,711 and S$3,714 psf. Two other luxury homes at Van Holland were sold for $3.2 million and $5.1 million.
Given the movement restrictions and uncertain economic outlook, it is quite remarkable that some super luxury and luxury new homes were sold during the circuit breaker period. This may indicate that despite the pandemic, many wealthy and ultra-rich continue to view Singapore as an attractive investment destination and a safe haven to park their funds.
Concurrently there are many conflicting narratives influencing the property market now. Some economists expect the global economic growth to dive in the months ahead followed by an equally sharp V-shaped recovery when strict distancing measures are lifted. Others are anticipating a more protracted slowdown and sluggish recovery. For Singapore’s real estate market, buying activities may likely rebound in some locations when the circuit breaker measures are eased and show flat activities resume. Well-located private homes with attractive pricing will continue to draw buyers.
This month, we may expect the new sales volume to remain around the same level or slightly lower as the circuit breaker measures are still in place. We anticipate that prices of new homes may trend between -5 and -3 percent for the full year while around 6,500 to 7,500 new homes could be sold.