Following the cooling measures of July 2018, sales momentum in the residential market slowed down. The economic outlook for the year was dampened by the US-China trade war & Brexit stalemate.
Developers built up a strong inventory of new projects from en bloc sales of older developments and government land sales program. This unsold inventory has ballooned from a low 19,000 units to nearly 35,000 units at the beginning of 2019.
Developers launched 29% more new homes for sale in 2019 than 2018. New projects drove home sales up by 13% in 2019. Home demand shifted to new homes in 2019 and resale volume fell to less than 9,000 units, which is about 31% lower than 2018’s 13,000 units.
The price index declined in Q1 2019 due to absence of high-priced projects and lower sales volume. This took a turn for the better and gained 1.5% in Q2 and 1.3% in Q3 2019 due to strong sales in high-end projects such as Boulevard 88, 3 Cuscaden and others.
On the commercial front, resistance to rents set in the second half of 2019. For the rest of the island, median rents eased by 1.87% year-on-year to $5.51 psf/month as opposed to a 4.3% rise in 2018. As for prices, Raffles Place was nearing peak at $3,300 psf while the rest of Downtown Core were still ranging between $2,200 psf and $2,500 psf.
A strong momentum was seen in strata office sales with transactions in Downtown Core and the Central Area making up 90% of the total.
2020: Opportunities amidst uncertainties
At the close of 2019, things were beginning to look up as the US and China were going to sign phase one of a trade deal in mid-January 2020 and Brexit was on track to take place on 31 January.
The Singapore economy was beginning to show signs of stabilisation from the sharp slowdown in 2019 when the outbreak of Covid-19 posed a new threat.
Besides tourism and its related sectors which are the worst hit, there has been a loss of retail sales and food and beverages businesses. Office expansion plans were curtailed by the economic slowdown. Delays in productions and disruptions in supply chain affected the industrial exports and imports.
Homes sales had been positive in January 2020, with a month-on-month increase of 15% in home sales volume to 618 units, and it is also 41% higher than the sales volume in January 2019. While the Covid-19 outbreak has resulted in the current travel restrictions and will likely put brakes on the momentum of home buying by foreigners in the short run, the actual impact remains to be seen. Based on the 9,226 caveats lodged for non-landed new homes sold in 2019, there were 573 buyers (6%) holding passports from various countries. Of this group, only 94 buyers (1%) were Mainland Chinese Passport holders. The remaining 94% of the buyers were locals and permanent residents.
From the latest new launches, it was observed that developers are also getting more creative in their marketing efforts. 3D video walkthrough which simulate walking through the showflat and online streaming of balloting are used to mitigate the efforts of the government's advisory to avoid crowded places.
Budget 2020 was announced on 18 February 2020 with measures to help businesses tide through this period and include property tax rebates for the five affected sectors - tourism, aviation, retail, food services and point-to-point transport services. The Finance Minister said that easing the cooling measures for residential market was not on his agenda because the priority now is to "stabilise the economy and address long-term structural issues."