Despite slow sales during the circuit breaker period, there’s been resilence in the market and Huttons Asia expects sales to hover between 8,000 and 8,500 units in 2020, with more project launches on the cards.
During the circuit breaker, developer sales plunged to one of its lowest levels in April to 277 units, or down 58% from the previous month and 62.4% over the same period last year, revealed Huttons Asia in its latest report.
The lowest monthly developer sales was in January 2009, when only 108 units were shifted.
“Compared to January 2009 when there was no circuit breaker, April 2020 sales are extremely good in light of the circumstances,” said Huttons.
“There were initial worries that sales may be dismal given that sales galleries are closed. But April developer sales have proved otherwise. Buyers were receptive of the virtual way of viewing a sales gallery with almost 100 sales concluded after the circuit breaker.”
In fact, sales did not stagnate even as the government decided to extend the circuit breaker for another month until 1 June.
While sales galleries and physical viewings remain suspended, the lifting of the circuit breaker measures on 1 June resulted to another wave of buying demand as buyers who were staying on the sidelines decided to take the plunge.
New sales in May increased by 75.8% month-on-month to 487 units. “The unexpected surge in demand drove developers to release more units for sale,” said Huttons.
With this, sales for the first 18 days of June (before the reopening of show galleries) were on par with the sales registered during the entire month of May.
“Pent up demand drove monthly sales in June up by more than 100% to its highest ever in 2020,” said the report.
Notably, 54% of June’s sales were made over 12 days of physical viewing – that is, from 19 to 30 June – while the rest were made over 18 days of virtual viewing.
Although there was a pivot to virtual viewing, there were still buyers who prefer to personally see the product.
A breakdown of June’s deals showed that there were more deals in the Core Central Region after physical viewing was allowed, pushing the average quantum up from $1.43 million to $1.51 million.
Huttons noted that June’s strong surge in developer sales was not unexpected, adding that the trend was also observed in other countries.
Meanwhile, the percentage of foreigners acquiring properties (new and resale) in Singapore continued to decline due to the government’s travel restrictions, which involve 14 days quarantine.
“The local property market is still very much supported by Singaporeans and thus a small adjustment in foreigner buying is unlikely to have a significant impact on the market.”
Over at the resale market, transactions within the resale market fell almost 60% due to curbs on physical viewing.
With the resumption of physical viewings, sales increased 65% month-on-month in June.
“Although resale prices were slightly higher in Q2 2020, this was achieved on the back of record low volume and may not be truly reflective of the market,” said Huttons.
Sales of new executive condominium (EC) units, on the other hand, significantly slowed to 50 units in Q2 2020. This comes as there was no new EC launch during the period.
Looking ahead, Huttons expect up to 20 new launches with about 6,000 units in the second half of 2020. It expects Cairnhill 16 to enter the market first, followed by Forett @ Bukit Timah and Penrose.
For the whole of 2020, Huttons expect sales to hover between 8,000 and 8,500 units.
“While the economy contracted by 12% in Q2 2020, economists agreed that the worst is over and recovery is on the cards,” it said.
“The resilience in the market and property as an endearing asset class among investors will drive sales in the market.”
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email email@example.com