The Covid-19 pandemic is an unprecedented global crisis that has overwhelmed healthcare systems and upended businesses around the world.
While it has ravaged economies worldwide and consumer sentiment remains largely subdued, the skies seem brighter for Singapore's property sector so far. A surge in buying activities and an uptick in sales were observed across many housing segments after the circuit breaker period.
But during the lockdown, flats were shuttered and home viewings were banned for two months to prevent the spread of the infection. As a result, private home sales dipped by 37.6 per cent from 4,269 units in the first quarter to 2,664 units in the second.
Overall prices of private homes slipped 0.7 per cent in the first half of this year. The public housing market was not spared either. Resale transactions tumbled by more than 40 per cent quarter on quarter to 3,426 units in the second quarter.
In a surprising turn of events, the property market roared back to life when viewings were permitted again. June's new home sales surged by more than 100 per cent month on month to their highest level in seven years.
The positive buying momentum continued for another four months. Indeed, more than 8,000 new homes were sold in the first 10 months of this year, which is highly encouraging.
Investor exuberance in the primary market spilt over to the secondary market as 3,467 private resale homes were transacted in the third quarter. This is a whopping 271.6 per cent increase from the previous quarter.
The HDB segment stunned market watchers as well. Prices of resale flats rose 1.5 per cent last quarter, after increasing marginally by 0.3 per cent in the preceding quarter.
Sales volume for resale flats rebounded by almost 25 per cent year on year to 7,787 units in the third quarter. Based on HDB data from data.gov.sg, last quarter's sales were the highest since the third quarter of 2010 when 8,205 units were transacted.
Singapore is not the only place that has experienced a surge in property sales. Other real estate hot spots like New York, Sydney, Shanghai and Seoul have similarly seen a hike in property sales in recent months.
The pandemic has caused many buyers to reflect deeply on their long-term investment strategies. Currency fluctuation and sharp declines in global equities have ravaged the wealth of many people. The focus on capital preservation has driven some investors to divert their funds to real estate properties, which are deemed to be a more stable and diversified source of returns during times of uncertainty.
In Singapore, the Government has stepped in to help businesses and households cope financially and prevent large-scale job losses, by unveiling four stimulus packages totalling around $100 billion. This is by far the largest rescue package launched. The stimulus released during previous downturns in 1998, 2001, 2003 and 2009 ranged between $230 million and $20.5 billion.
Other measures were put in place to stabilise property prices. For instance, eligible borrowers are allowed to defer loan repayments while developers may apply to extend the completion period of developments. This has prevented sellers from panic selling and slashing prices too deeply to move sales.
Reference: Property market's state of play