How did the Singapore property market fare in February, amid the Covid-19 pandemic? This is what you need to know.

ZUU online Posted On March 17, 2020

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February new home sales bucked expectations even as Covid-19 spread around the world. Here’s what you need to know, according to Christine Sun, Head of research and consultancy at OrangeTee & Tie.

Home demand inches up amid economic uncertainties

Despite the current pandemic and uncertain economic outlook, new home sales rose a third consecutive month. This is also one of the strongest February showing in recent years. According to the developers’ sales survey by the Urban Redevelopment Authority, new home sales surged 57.3 per cent month-on-month (m-o-m) from 620 units in January to 975 units last month. Including executive condominium (EC) units, developers sold 1,314 units, registering a 105.3 per cent when compared to the 640 units sold in January this year.

The 975 new homes excluding EC sold last month was the second-highest February sales in eight years, slightly below the 979 units inked in February 2017. Last month’s sales volume was also above the monthly average of 904 units transacted in the previous 12 months (Feb 2019 to Jan 2020).

Two large projects were launched last month – the 522-unit The M which sold 380 units and the 496-unit Parc Canberra EC, which moved 324 units. Excluding these two launches, 610 units were sold collectively at other projects which is almost on par with the total units transacted in January (640 units). The resilient sales demand indicates that buying sentiment was largely positive last month.

Sales had performed better than expected given the Covid-19 outbreak and seasonal lull during the Chinese New Year period. The surge in sales may be attributed to more investors diversifying their portfolios to property investments after the recent stock market rout.

The number of Singaporean purchases grew strongly last month. According to URA Realis data, 812 non-landed homes excluding EC was bought by Singaporeans last month, up from the 413 units transacted in January 2020 and 351 units in December 2019. The number of foreign buyers (permanent residents and non-permanent residents) had similarly increased from 116 in December 2019 to 149 in February 2020.

Moving forward, the increasing volatility of the financial markets may continue to propel investors to the real estate sector as properties are widely regarded as safe-haven assets that offer more stable returns than other investment types. The softening of the Sing dollar in recent months may attract foreigners to invest in properties here.

The Federal Reserve had also slashed interest rate to near zero which is aimed at keeping financial markets stable and making borrowing costs low. The Fed will also restart its quantitative easing program as part of its emergency stimulus. These measures intended to spur lending and spending may continue to stimulate housing demand with the increased liquidity. More homeowners may refinance their housing loans while some buyers may purchase larger housing units in the coming months given the increased affordability.

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