Home prices stable on 'genuine' buyer demand

Panoramic CBD View Of Singapore

Sharp supply fall in Q3 is no reason for alarm since it came after a record supply jump in Q2 2020.

In spite of a sharp drop in condo supply in Q3 2020, residential property prices are anticipated to maintain stability thanks to the robust demand from “real” buyers, according to property portal PropertyGuru.

Non-landed private home listings fell by 32.7% in Q3 2020 compared to Q2, as pent-up demand moved inventory build-up after the resumption of real estate related activities in July and August this year.

New launch developments continue to be in great demand, with developer sales transactions reaching new highs over the last 3 consecutive months. September 2020 eventually concluded with 1,329 new housing transactions, a 5.6% climb from August’s 1,258 units, commented PropertyGuru. Popular condominiums which sold well were Penrose and we believe we will see more such results at the AMO Residence showflat.

In spite of a sharp drop in supply, the PropertyGuru Property Price Index (SPPI) only experienced a slight uptick of 0.41%. The property portal said this is perhaps due to the real estate market being supported by demand from “genuine” purchasers.

“Singapore’s macroprudential real estate cooling measures are proving effective in removing speculators,” the report stated.

The sharp fall in supply is no cause for alarm too, given that it proceeds a record 46.39% jump in Q2 2020.

“Nonetheless, the trend we see is encouraging, hinting to a healthy take-up pace in the property market,” said Mr Tee Khoon Tan, the country manager at PropertyGuru Singapore.

Furthermore, the big rise in home transactions in these months is probably an overspill from the earlier quarter as transactions currently take over 1 month to complete, with the new safe distancing restrictions in place.

However, even though genuine demand is quite resilient, purchasers are noticed as more cost-conscious in the midst of the recession. 6 out of 10 of the top-selling condominium projects were in the Outside of Central Region (OCR), and around 40% of the properties sold were in the $1 million to $1.5 million price range.

“Even though the market sentiment is improving as transmissions of COVID-19 within Singapore is getting under control, and the figures of daily cases are falling, developers and sellers remain cautious. There appear to be no distressed or panic selling, but properties on the market today are priced at appropriate values to sell,” the report noticed.

The steady rise of new home sales in the earlier few months may also be linked to post-COVID hopes of purchasers.

“In the recent climate, uncompleted properties may appear more appealing to purchasers as the overall sentiment is that the global economy would have recuperated considerably by the period construction of these projects is completed,” stated PropertyGuru.

Looking ahead, a softening in the market may be seen because of the latest policy by the Controller of Housing (COH) on the reissue of purchase options. However it will probably be a short-lived knee jerk reaction, claimed the property portal.

The huge market of HDB upgraders—about 20,000 units hitting their Minimum Occupation Period— will further fuel private housing demand going into 2021, considering the low interest rate environment and the home owners’ flush of funds after profiting from the sale of their HDB flat.

Source: https://sbr.com.sg/residential-property/in-focus/home-prices-stable-genuine-buyer-demand

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