Covid-19 Changes The Way Of Project Launch

Following an announcement by the Ministry of Health (MOH) on 24 March 2020 on the tighter measures needed to minimise further spread of covid-19, the Urban Redevelopment Authority (URA) issued a circular to all licenced developers on the strict compliance to safe distancing.

In addition to temperature taking and record of travel history of visitors, specific guidelines given to developers to ensure safe distancing in the sales gallery include:

  1. Not more than 1 person per 16 sqm of usable space in the sales gallery
  2. Groups within the sales gallery are limited to a maximum of 10 persons per group and a minimum spacing of 1 metre must be maintained between persons within the group
  3. Space markings of 1 metre must be shown clearly for queues, viewing of the model of the project, lifts and other relevant areas within the sales gallery
  4. It is strongly recommended that developers offer viewings by appointments so as to ensure that the number of people in the sales gallery is in compliance with the guidelines
  5. The entire crowd size at the sales gallery must be less than 250 people at any time

The sales gallery of Kopar At Newton was the prototype of how developers can launch their new projects in the weeks to come. A staff from the Controller of Housing (COH) would visit the sales gallery of new projects to ensure that these arrangements are in compliance with URA's requirements.

A straw poll among a few major developers showed that they are supportive of the need to minimise the further spread of Covid-19 by fulfilling the requirements. As far as possible, they would like to keep the sales gallery open for any prospective who is interested in their project. It takes minimal effort to implement all the new requirements. According to developers, visitors are also more willing to visit the sales gallery with all the measures in place. It just means both agents and visitors have to do things differently from the past: not to have more than 10 people clustering around, not to linger behind after viewing if there are other people waiting in the queue, and no big crowd on the first week of a major project launch.  

URA also encouraged viewing by appointment, which is an effective way to prevent bunching or clustering of visitors. Some developers see this as an effective approach for smaller projects which do not need a lot of hype or high-end projects which have a more targeted audience. One advantage of this approach is that developers can save costs by cutting back on traditional media. Another advantage is that agents will be more focused to source for and invite prospects who are genuine buyers.  

Launch now or wait?

Some developers are of the view that they should wait for more clarity of the current situation, such as whether the Covid-19 can be contained in the coming weeks with the tighter measures implemented recently such as working from home, closure of entertainment venues, suspending all religious services and others. Moreover, April is usually a reporting month when listed companies announce their performance in the first quarter of 2020. Due to a confluence of factors directly- or indirectly-related to Covid-19, we can expect more negative news than good. This will tend to affect market sentiment as well as the confidence of potential investors. However, developers are mindful that the time clock is ticking with regards to the mandatory five-year project completion period and the need to sell all units by then or they will be liable for the payment of additional buyer stamp duty at 25% of the land price. As a number of the new projects are being built on sites purchased in 2017 and 2018, the window for waiting is at best two to three months before developers need to crank up their marketing plans.

That said, April is likely to be a relatively quieter month for project launches and hopefully, sales activity will pick up from May onwards.

Update: In line with the Government’s directives of circuit breaker measures announced on 3 April 2020, all show galleries set up by developers to market and sell their properties will be closed with effect from 7 April 2020 until 4 May 2020 (inclusive).