Transaction volumes of non-landed private homes rebounded in Q3 2020 due to pent-up demand

The rebound in transactions was not only evident in the new sale market but also in the resale market as well. Total resales transactions increased by more than three times to 2,480 units in Q3 2020 from the previous quarter’s 758 units.

Despite experiencing the worst recession due to the COVID-19 pandemic, Singapore’s non-landed residential market witnessed a “gravity-defying” rebound in the third quarter of 2020, revealed a Knight Frank report.

In fact, transaction volumes of non-landed private homes, excluding Executive Condominiums (ECs), more than doubled to 5,895 units.

“Pent-up demand from buyers who deferred their purchases coupled with low interest-rates drove the pick-up in sales momentum from both needs-based buyers and those who feared that prices might increase in the near-term,” said the report.

“A significant number of the almost 50,000 HDB homeowners who collected their keys in 2014 and 2015 were also able to capitalise their gains and upgrade to the private market after fulfilling the five-year Minimum Occupation Period (MOP).”

Recommended article: HDB Flat Reaching MOP Soon? What Are Your Options?

The rebound in transactions was not only evident in the new sale market but also in the resale market as well. Total resales transactions increased by more than three times to 2,480 units in Q3 2020 from the previous quarter’s 758 units.

Knight Frank attributed the hike in resale transactions to the resumption of in-person viewings during Phase 2 reopening of the economy and to owners being more confident in allowing viewings given the drop in COVID-19 cases.

Meanwhile, non-landed private residential prices, excluding ECs, held flat at 148.7 in Q3 2020, after increasing 0.4% in the previous quarter.

This comes as prices only fell at the Core Central Region (CCR).

In Q3 2020, the CCR saw non-landed private home prices drop 4.9% quarter-on-quarter.

Transaction volumes, however, soared 94.8% quarter-on-quarter to 791 units. The hike was mainly led by the resale market, which saw sales increase by more than two-fold to 509 units in Q3 2020 from 207 units in Q2 2020.

With fewer new projects launched in the area, primary sales transactions increased by a more moderate 42% quarter-on-quarter to 282 units. New launches in CCR included boutique project Mooi Residences, which moved three units at an average price of $2,590 per sq ft (psf).

The Rest of the Central Region (RCR), on the other hand, registered a 3.3% quarter-on-quarter increase in prices, while transaction volumes rose to 2,504 units in Q3 2020 from the previous quarter’s 843 units.

“With most of the new project launches in Q3 located in the RCR, new sale volumes saw the biggest jump at 177% quarter-on-quarter as compared to the CCR and OCR, recording 1,797 transactions,” said Knight Frank.

New sales were bolstered by projects like Penrose and Forett @ Bukit Timah which sold 60% and 30% of their total units, respectively, during their launch weekend.

Previously launched projects also performed well, with the Woodleigh Residences selling 144 units, up from Q2 2020’s 25 units.

Suggested read: 6 Ways to Upgrade from your HDB to a Private Condo or EC in 2020

Non-landed prices in the Outside of the Central Region (OCR) climbed 1.7% quarter-on-quarter, while transaction volumes surged 127% quarter-on-quarter to 2,600 units.

“Besides the RCR, buyers’ attention also focused on the OCR as healthy demand from HDB upgraders supported sales,” said the report.

Moreover, the OCR recorded brisk sales at large-scale projects, despite the lack in new launches.

Treasure at Tampines moved 324 units, up the 184 units sold in Q2 2020, while Parc Clematis shifted about 203 units, some 50 more than that sold in Q2 2020.

Over at the rental market, rental transaction volumes of non-landed private homes jumped 33.5% to 16,449 in July and August, compared to the first two months of Q2 2020.

“The increase stemmed from a portion of the leasing transactions being short-term extensions or shorter renewals, from either tenants needing a place to stay in the interim before moving to a new home or those still waiting out the pandemic-led storm,” said Knight Frank.

Rents slightly declined across all segments, with the ultra-luxury segment posting the biggest decline due to increased terminations of expatriates as well as cost-cutting by companies.

Looking ahead, Knight Frank expect prices to remain largely flat for the entire 2020 and new sales volumes to hit around 8,000 to 9,000 units as the city-state moves towards Phase 3 of the circuit breaker.

“While the newly issued directive by URA restricting the re-issuance of the Option To Purchase (OTP) might ease sales volumes moderately, there remain buyers whose livelihoods are relatively unaffected or with dry financial powder from previous en bloc proceeds,” it said.

Looking for a property in Singapore? Visit PropertyGuru’s Listings, Project Reviews and Guides.

This post was originally posted on Property Guru Property Market News Section