Private home prices defied the pandemic to edge up in the second quarter, but the lack of launches during the circuit breaker period kept sales numbers down.
Yesterday's data also prompted analysts to warn that a market recovery is far from certain as business closures, salary cuts and job losses take their toll in the months ahead.
The data showed that prices rose 0.3 per cent in the second quarter from the previous three months, reversing the Urban Redevelopment Authority's (URA) flash estimates of a 1.1 per cent decline.
The rise is in stark contrast to the 1 per cent decline in the first quarter, and puts prices up 1.2 per cent from the second quarter of last year.
"This surprising turnaround was due to pent-up demand in the latter half of June as show-flats were opened (from June 19) as well as viewings... allowed," noted Knight Frank Singapore head of research Leonard Tay. "In the first half of 2020, the overall prices of private residential homes fell by 0.7 per cent, a very mild decline considering the pandemic and economic disruption."
But Ms Tricia Song, head of research for Singapore at Colliers International, warned that prices and take-up could drift lower in the second half of the year depending on the extent of the economic fallout.
The price recovery in the second quarter was uneven, she noted, with the increase led by non-landed homes in prime areas, which jumped 2.7 per cent compared with a 2.2 per cent drop in the first quarter.
Non-landed property prices in the city fringe fell 1.7 per cent compared with a 0.5 per cent decline in the previous quarter.
Prices in the suburbs edged up 0.1 per cent compared with a 0.4 per cent fall in the previous quarter.
Landed home prices were flat in the second quarter, after dipping 0.9 per cent in the first, the URA said.
Ms Song noted that prices of most new projects in prime districts were at best unchanged, and there were deep discounts at completed estates such as 8 Saint Thomas.
This recorded 14 caveats in the second quarter at a median price of $2,730 per sq ft (psf), while earlier units sold at $3,100 to $3,200 psf.
Projects doing well
TREASURE AT TAMPINES
Units sold: 185
Launch: March 2019
Units sold: 154
Launch: August 2019
Units sold: 150
Launch: March 2019
That said, some larger recently completed projects in the financial district saw renewed interest. Marina One Residences sold 78 units in the first quarter at a median price of $2,295, and 35 units at $2,312 psf in the second, Ms Song noted.
Developers launched 1,852 uncompleted private homes excluding executive condominiums (ECs) in the second quarter, compared with 2,093 units in the first.
They sold 1,713 units (excluding ECs) in the second quarter, 20.3 per cent fewer than the 2,149 units sold in the first. New homes sales slowed in April and May but rebounded last month due to the end of the circuit breaker and reopening of show-flats.
There were 3,862 new private homes sold in the first half, just 7.8 per cent lower than in the same period last year, noted Mr Ong Teck Hui, senior director of research and consultancy at JLL.
But the resale market was hit much harder by the circuit breaker, as only 951 units were sold in the second quarter - the lowest since the first quarter of 1998 when 644 units were transacted, he added.
The growing number of transactions as well as relative price stability in the second quarter may prompt developers to launch more projects in the coming months.
ERA Realty head of research and consultancy Nicholas Mak said 17 new projects with a total of 5,243 units would be ready for launch in the next six to nine months.
Meanwhile, rents are expected to continue to trend lower in the coming quarters as leasing demand weakens due to the economic slowdown and ongoing border controls, Mr Ong said. Private home rents fell 1.2 per cent in the second quarter versus a 1.1 per cent rise in the first. Rental volume dipped below 20,000 for the first time since the fourth quarter of 2017, he noted.
There were 49,090 uncompleted private homes (excluding ECs) in the pipeline with planning approval as of the end of the second quarter, up from 48,868 units in the first quarter. There were 27,977 units unsold compared with 29,149 in the first quarter.
But Ms Song noted that due to the construction halt in the second quarter, only 86 private homes (excluding ECs) obtained temporary occupation permit, well down from the 1,528 units completed in the first quarter and 2,298 in the last three months of last year. "The number of completions in 2020 will be significantly below the 10-year historical average of 12,948 units."