Singapore Residential Market Outlook 2021
Residential market outlook 2021 after phase 2 Covid restriction is even stronger as it go through another powerful acid test. The result of this will highlight the stability & fundamental of Singapore Residential Market. What we have seen is the firm local demand as at this period not many foreign purchasers can come to Singapore. Credit to Singapore government in controlling situation & steering economy during crisis. Also developer experience on adjusting products & services for the situations.
Effects of Phase 2 Covid restrictions on residential property market
Primary residential market launch and sales in April 2021 The sales momentum in the Singapore private residential property primary market continued into April 2021. Real estate developers launched 1,038 private housing units, excluding Executive Condominium (EC), in April 2021, 8.2% more than the preceding month. Four new residential projects were launched in April. Three of the projects were located in the prime Core Central Region (CCR), as there are more projects in the CCR and city fringe areas than in the suburban areas lined up for launch this year.
Table 1: Residential projects launched in April 2021
Project Name | Location | Locality | Tenure | Total no. of units in project | Median transacted price in Apr-21 ($psf) |
Irwell Hill | CCR | 99-year leasehold | 540 | $2,628 | |
Slim Barracks Rise | RCR | 99-year leasehold | 165 | $2,009 | |
Grange 1866 | Grange Road | CCR | Freehold | 60 | $2,718 |
Peak Residence | Thomson Road | CCR | Freehold | 90 | $2,576 |
In April, developers sold 1,262 private housing units (excluding EC), 2.6% fewer than the 1,296 units sold in March 2021. In the current market that is affect by the pandemic, any sales above 1,000 units in a given month can be considered a good market performance. The median prices of the four new launches are above $2,000 psf, which is becoming more common among the prices of uncompleted properties in the CCR and the Rest of Central Region (RCR). No new EC project was launched, but developers sold 80 new EC units in April, about the same sales volume as the preceding month.
Effects of Phase 2 Covid restrictions
Last week, the Singapore government announced tighter restrictions for the next four weeks to contain the spread of the coronavirus. Phase 2 (Heighten Alert) will start from 16 May to 13 June 2021. The Singapore residential property market had a stellar performance in terms of sales and price growth after the lifting of the Circuit Breaker last year. The effects of any new tightening of the social distancing restrictions on the transactions in the property market will depends on three factors:
- Severity of the restrictions.
- Duration of the restrictions.
- Availability of substitutes.
Firstly, Phase 2 (Heighten Alert) is not as severe as the Circuit Breaker. The residential project show flats will still be open. In the resale market, buyers can still visit to view completed properties offered for sale.
Secondly, the duration of Phase 2 (Heighten Alert) is four weeks, shorter than the 8-week Circuit Breaker.
Thirdly, after the experience of the Circuit Breaker last year, many developers and their agents have the necessary IT platforms to market the residential properties remotely, such as through virtual show flats. Therefore, there are substitutes to physical show flats and the marketing efforts would not be greatly disrupted.
Anecdotally, the private housing sales in the first two weeks of May was at about the same level as in April 2021. The property sales volume could dip marginally during the Phase 2 (Heighten Alert), especially if property developers were to avoid launching their residential projects during the 4-week Heightened Alert. However, the pent-up demand accumulated during the 4 weeks could spur more transactions after Phase 2 is lifted.
Hence, by all measures, the Phase 2 (Heighten Alert) could slightly dent the transaction volume during the 4-week period. However, the property market will by all likelihood, return to business as usual once the restrictions are lifted.
It is starting to feel like déjà vu.
Analysis By: Nicholas Mak Head of Department, Research & Consultancy ERA Singapore ERA APAC Centre. 17 May 2021
Editor's comments on Singapore Residential Market outlook 2021 after phase 2 Covid restriction.
Residential Market outlook 2021 at this point of time is looking good. Referring to the URA Statistic, Sales figure of 2020 is even stronger than 2019 before pandemic. In my opinion, 2 main factors contributing to this. One is the strong confidence of Singapore citizen to government in handling crisis. Another factors is liquidity & availibility in Singapore monetary during pandemic in 2020.
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