COVER STORY
Singaporean property developers are making an unexpected comeback as sales rally in Q3
Residential property sales rally postcircuit breaker despite economic fallout New home sales are on the rise, even though Singapore remains in recession.
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t has been a challenging year for businesses around the globe, and Singapore is no exception, with the economy expected to remain in recession for the whole year. But property developers in the Lion City are making an unexpected comeback as demand failed to falter despite the onslaught of economic pitfalls. Private developers saw their sales rally in the third quarter immediately following the end of the circuit breaker period. New sales in the non-landed private residential market rose to a fevered pitch and reached 1,329 units in September— its highest on record since July 2018, before the additional buyer’s stamp duty (ABSD) went into effect. The sales volumes exceeded every single monthly sales volume recorded in 2019. It is also 4.8% higher than sales in September 2019—ironic that a month caught 28
SINGAPORE BUSINESS REVIEW | DECEMBER 2020
in the middle of a pandemic-led recession should exceed that of a fairly normal month a year ago, notes Leonard Tay, head, research at Knight Frank Singapore. What made this possible was the pent-up need from buyers seeking new homes following months of no viewings due to social distancing measures, as well as low interest rates Tay explained. “A significant proportion of the almost 50,000 HDB homeowners who collected their keys in 2014 and 2015 were also able to capitalise on their gains and upgrade to the private market, after fulfilling the five-year Minimum Occupation Period (MOP),” he added. Whilst the newly issued directive by the Urban Redevelopment Authority (URA) restricting the reissuance of the option to purchase (OTP) might ease sales volume moderately, demand remains
A significant proportion of HDB homeowners were able to capitalise on their gains and upgrade to the private market
from buyers whose livelihoods remain relatively unaffected by the recession. There are also prospective buyers who have dry powder from previous en bloc proceeds. In a separate report, OCBC Investment Research noted that amongst the top 10 best-selling projects in September, only one came at a medium price of $1,500 per square feet (psf). Overall, sales in Q3 reached 5,895 non-landed residential units sold (excluding executive condominiums), more than double or 146% higher than in the previous quarter. This is also 16% higher than Q3 2019 levels. Sales prices remained flat during the quarter compared to Q2, and are expected to remain flat until the end of the year, according to Knight Frank’s Tay. Meanwhile, new sale volumes are forecasted to reach about 8,000 to 9,000 units as Singapore moves
