The Singapore property market is showing continued resilience in the face of a deepening recession: In the third quarter of 2020, official figures by the Ministry of Trade and Industry show that Singapore’s GDP contracted by 7% year-on-year.
Yet, in the property sector, there was a burst of activity, with the PropertyGuru Singapore Property Market Index Q4 2020 (PMI Q4 2020) recording a 0.41% increase from 111.9 to 112.4 points. Here are some of the key highlights of the report:
Property prices are stable due to genuine buyers
Despite a sharp decrease in supply, the PropertyGuru Property Price Index (SPPI) only saw a slight gain of 0.41%. This is likely due to the market of genuine buyers. The Government’s macroprudential property cooling measures are proving effective in weeding out speculators.
Robust demand likely driven by HDB upgraders
About 20,000 Housing Development Board (HDB) units will or have already come off their Minimum Occupation Period (MOP) this year. Given low-interest rates and their access to funds (after turning a profit from the sale of their flat), the homeowners of these properties are likely to be large contributors to the robust demand observed.
July and August saw the release of pent-up demand
With new safe distancing measures in place, property transactions now take over a month to complete. This explains the burst of activity observed in July, August and September – with the demand likely coming in from the previous quarter.
Demand is healthy, but buyers more cost-conscious
Although genuine demand is somewhat resilient, buyers seem more cost-conscious amid the pandemic recession. Six out of 10 of the top-selling projects were in the OCR, and almost 40% of the properties transacted were in the $1 million to $1.5 million price range.