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Amid the COVID-19 pandemic with worsen economic and rising unemployment rate, 1,227 new home units in Singapore were sold in August 2020, a 9.3 percent raise over 1,080 new home units sold during July 2020 and also 13.6 percent increment year-on-year.
The real estate market especially new home sales in August 2020 had performed relatively well amid the COVID-19 pandemic, rising unemployment rate, and Hungry Ghost month according to Ms. Sun.
According to a poll by the Monetary Authority of Singapore, Singapore’s gross domestic product is expected to shrink 6 percent this year. Retrenchment figures from the Ministry of Manpower showed for citizens and non-citizens stand at 3,220 and 6,700 in the first and second quarters respectively.
Labour chief Ng Chee Meng mentions that he is expecting more job losses in the next 6 to 12 months from the pandemic impact on the economy.
The bulk of purchasers for the new non-landed private residential units sold in August 2020 is Singaporeans. Residential properties are still deemed to be a safer investment vehicle for Singaporean investors who want a more stable ROI during uncertainty time.
According to Ms. Christine Sun, Orange Tee & Tie, head of research and consultancy, Singapore real estate generally yields good capital appreciation over the past 30 years, particularly new launch condo at a good location, quality finishing, and developed by renown developers. The low-interest-rate environment also contributed to new home sales.
Also according to Mr. Evan Chung, head of Knight Frank’s property network, most of the purchasers are buyers who need a new home after selling their properties, and those getting married after their wedding are affected by the pandemic.
Mr. Chung also added that fear of missing out also contributed to the new home sales. Property buyers feel that the probability of price increases is greater than the probability of price decreases for Singapore real estate. They do not want to miss out on the upswing in the property’s value that was proven by records after every recession. As such, with discounts and promotions from developers, new home sales being to increase.
During August 2020, 604 residential units were sold in the Rest of Central Region (RCR), Outside Central Region (OCR) accounted for 497 new residential units and Core Central Region (CCR) with 126 new homes sold.
The median prices per square foot (PSF) is higher in August 2020 over July 2020. The top nine new developments in terms of sales in August 2020 had an increment in their estimated median unit prices. According to Mr. Lam Chern Woon, Edmund Tie senior director, research and consulting, most best-selling new launch developments have seen an increment in pricing this year.
However, two of the top ten selling projects, The Garden Residences, and The Woodleigh Residences saw a decrease of 5.3 percent and 5.6 percent in their median per square foot pricing. Both projects managed a small increment, 0.3 percent, and 1 percent respectively when compare against July 2020 per square foot pricing.