Singapore's residential property market is beginning to show the effects of COVID 19 with the latest figures from the Urban Redevelopment Authority indicating a price decline across the board for the first quarter of 2020.

According to the URA, the decrease was led by the landed segment (down 1.7 per cent QOQ), while non-landed residential segment fell 1.0 per cent QOQ, driven by the Core Central Region (CCR) which fell by 1.5 per cent QOQ; Outside Central Region (OCR) where prices fell by 1.0 per cent QOQ and Rest of Central Region (RCR) fell the least by 0.5 per cent QOQ. 

Colliers International Singapore Head of Research Tricia Song told WILLIAMS MEDIA that while the government had taken steps to combat the economic impact of the pandemic, certain areas of the market required more attention.

At a glance: 

• New figures from the Urban Redevelopment Authority have a decrease across the board for Singapore private residential property prices in the first quarter of 2020.
• Based on advance estimates from the Ministry of Trade and Industry (MTI) on 26 March, Singapore’s Q1 GDP contracted by -2.2 per cent YOY and -10.6 per cent QOQ (seasonally adjusted annualized).
• Colliers Singapore expects developers’ sales may fall to 8,000 units for the full 2020, compared to the 9,912 units in 2019.

"The Singapore government has announced a massive supplementary budget in Parliament on March 26, 2020 to tackle the deepening impact of the coronavirus (COVID-19) pandemic on its economy," she said.

"However, Colliers noted that the SGD48 billion Resilience Package did not offer measures that private housing developers had been hoping for – such as an extension of project completion timeline under the Additional Buyer’s Stamp Duty rules.”

"Transactions have tapered off sharply in March from a strong February, as the effects of the COVID-19 are starting to reverberate through the economy and hurt sentiment.

"Based on caveats downloaded on 1 April 2020, developers sold 528 new homes (excluding ECs) in March 2020, down sharply from the 947 units in February. Secondary transactions were also down, at 328 units in March, from 436 units in February." 

Based on advance estimates from the Ministry of Trade and Industry (MTI) on 26 March, Singapore’s Q1 GDP contracted by -2.2 per cent YOY and -10.6 per cent QOQ (seasonally adjusted annualized).

MTI forecast Singapore to head into its first recession in two decades, putting 2020 growth in the range of -4 per cent to -1 per cent.

Colliers International Singapore Head of Research Tricia Song. Source: Colliers International

MAS has warned of job losses and slower wage growth as recession looms. Job security is one of the key drivers for home purchases.

Ms Song said with home prices highly correlated to household income and the economy, Colliers expected private residential prices could decline 1-3 per cent in 2020, in line with the economic contraction.

"The projected decline in 2020 will be the first year of decline since 2016 (-3.1 per cent)," she said.

"We do not think prices will fall as much as the 25 per cent over Q2 2008 to Q2 2009 due to the Global Financial Crisis (GFC) as there were rampant speculation and loose credit prior to the GFC.

"The nine rounds of property cooling measures in 2009-2018 have reined in speculation and price increases over the past three years were more sustainable, in our opinion. We also believe there is room for the government to ease or unwind earlier measures, which should lend some support to prices. 

"We now expect developers’ sales may fall to 8,000 units for the full 2020, compared to the 9,912 units in 2019."

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