Singapore's Resilient Real Estate | Home Prices Increase Amidst Covid Restrictions
As Singapore is turning towards treating Covid-19 as an endemic and leaving behind the Covid-Zero Strategy, it is slowly re-opening borders with caution. The Nation is still under recently extended restrictions to curb the daily tally that is surpassing 3,000.
Despite Covid restrictions and the start-stop measures implemented throughout 2021, Singapore’s real estate market started its rebound at the start of the year with property prices on an up-trend and 1,633 homes sold in January according to Urban Redevelopment Authority’s (URA) data.
With the construction industry facing challenges, this will continue to fuel demand and push property prices up. The URA’s private residential price index saw an increase of 1.1% from the previous quarter.
The pandemic new norm of work-from-home requirements has emphasised a need for space where Buyers are willing to spend on larger but older flats. Property agency OrangeTee & Tie’s data show more than 14,000 resale HDB flats were transacted in the first half of 2021 with prices increasing 6% in that duration.
Buyers upgrading from the public flats to private units will spur the demand pushing the prices upwards. Nicholas Mak, Head of Research and Consultancy at APAC Realty Ltd unit ERA states that prices for private homes may go upwards between 6% to 8% compared to 2020’s 2.2% growth. While developer sales may have taken a backseat to resales in the third quarter of this year, new launches are expected next year in prime areas and with travel into Singapore easing, this will drive home sales and prices further, said Mak.
URA data reflects an 82% increase of new private units purchased in July with 1,589 from only 872 in June, the highest since January. “The property market will be ending the year on a higher note,” said Christine Sun, Senior Vice President of Research and Analytics in OrangeTee & Tie. According to Christine Sun, the buying frenzy is triggered by buyer’s fear of being priced out as Singapore’s economy is set for recovery with the government’s plans to reopen the country with 84% of its population fully vaccinated.
As Singapore cautiously reopens and foreigners return, the property market with foreign buyers is gaining momentum to recover from the sluggish foreigner buyer market in 2020. Chinese nationals make up a large portion of foreign buyers being the most active overseas buyers and may rise even further due to potential new taxes aimed at China’s wealthiest citizens, says Christine Sun.
Singapore being a stable economy with a steady currency, low taxes and good governance, it has always attracted foreign buyers to purchase property. The nation recently lifted the quarantine for travellers coming from China, Hong Kong and Taiwan and announced quarantine-free travel for Germany and Brunei as well and allowing travellers from Australia to home quarantine. The property market has been resilient in Covid times with home prices thriving and it is now poised for an upward trajectory.