Summary of Article:
Home sales in Singapore so far in this pandemic-ravaged year have exceeded expectations.
Cash-rich buyers have pushed new homes sales for the first 10 months of 2020 to 8,021, as the unemployment rate rose to 3.6 per cent in September from 3.4 per cent in August. Economists think the unemployment rate will stay sub-4 per cent for the full year. The 8,021 volume is 4.5 per cent lower than the 8,401 units sold in the first 10 months of last year.
With the strong volume, some expect that private residential property prices for 2020 as a whole may end in positive territory after prices rose 0.8 per cent quarter-on-quarter in Q3, nudging the overall price index up 0.1 per cent year-to-date. In comparison, prices increased by 2.1 per cent in the first three quarters of last year.
Various measures, such as allowing borrowers to defer their loan repayments, and temporary relief measures, such as granting a waiver of extension charges of up to a total of six months for developers applying to extend their existing completion and/or disposal deadline, have probably prevented homeowners and developers from slashing prices to move sales.
In the resale market, the biggest quantum paid for a mass-market condominium transacted in Q3 2020 was a 428 square metre (sq m) resale unit at The Trilinq that was sold for S$4.8 million or S$1,042 per square foot (psf) in September. In August, a resale unit at The Tembusu, which was a 361 sq m freehold condominium sold for S$4.6 million or S$1,184 psf.
The pandemic has brought home the safe haven that is Singapore. And for some, it is the only asset worth owning.
The property market has been resilient and it exceeded expectation of many analysts and value investors.
The more cautious analysts at the beginning of the Circuit Breaker would call for a drop of prices of 10% to 15%, where the value investors would want to pick up distress or near distress properties at a discount.
However, going towards the year ending 2020, the statistic tends to show otherwise. From the article, the Property Price Index might even show a rare positive by the end of 2020.
What to expect looking forward to year 2021 ? How would you want to deal in property investment in the coming year?
Given the positive news of effectiveness and roll-out of the vaccine by the year end or April 2021, despite the recent hikes of the cases in the region and the West, it should be projected to be a better growth in the real economy of the world, with the borders greadually reopening.
This would be extremely important to Singapore which very much dependant of trades and connectivity of the world.
As for the property sector, the current momentum of increasing prices and volume would also spill over to 2021, where Singapore would welcome back the international investors.
With Singapore uniquely placed for its relatively more stable business and political environment, with lower interest rates environment continuing, the prices and volumes might continue its momentum.
Proper planning on the allocation of funds into this asset class is strongly advised.
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