Bruce Lye, managing partner of SRI, was one of the first real estate agents in Singapore to conduct a property tour on Zoom. It was the tour of a penthouse at Urban Suites and took place in the morning of April 3. In fact, there was an Indonesian buyer who contacted him after the Zoom tour to find out more details about the property.
Later that afternoon, the government announced circuit-breaker measures that included the suspension of non-essential activities to curb the spread of Covid-19. That includes showflat and property tours.
Lye has therefore switched to virtual tours on Zoom instead. The difference is that he now conducts Zoom meetings and showflat tours from his laptop under the shade of a trellis in his garden. He continues to receive enquiries on the properties he is marketing, including an offer on a bungalow. “A lot of people are sitting at home with nothing much to do, and so we continue to receive a lot of enquiries,” he says.
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For resale properties that are vacant, the SRI agents had permission from the landlords to have the locks replaced by combination number locks. This way, if an interested buyer or tenant wants to view the property, the agent can just give the combination to unlock it. Hence, the interested party can still view the property on his or her own. “We are thinking out of the box,” he says. “We need to have business continuity plan for the landlords as well as our agents during this period.”
SRI has 900 agents, and Lye continues to conduct training for his agents via Zoom – at 1pm every day. “Some agents are parents who have children who do home-based learning in the mornings, while others have it in the afternoons. So the best time is 1pm, while they are having their lunch,” he says.
The SRI leaders are still active in recruiting agents — on Zoom. “This is a good time to do recruitment as the online platforms are available,” says Lye. “At the end of the day, real estate is still a people’s business.”
Lye also sees the circuit-breaker as a good time to take a step back and reflect on business. “We tell our agents to make an effort to connect with their clients every day,” he says. “It’s a good time because their clients have to stay home too.”
Whenever there is a crisis, everyone thinks it is the worst they have seen, observes Ong Choon Fah, CEO of property advisory firm Edmund Tie. During the severe acute respiratory syndrome (SARS) outbreak in 2003, there was much fear too. With the Global Financial Crisis of 2008, “we thought the sky was falling,” she says. “But this crisis is the first time that we have a global pandemic and the first time that we are experiencing a global shutdown.”
The Covid-19 crisis has made work from home or WFH a global phenomenon. “The role of the office will change,” says Ong. When Edmund Tie moved into its new office at UIC Building at Shenton Way three years ago, Ong had already configured the space to make provision for hot-desking alongside dedicated workspaces. “If we need to expand, we can work from the co-working space in the building,” she adds.
However, with the circuit-breaker and WFH, that begs the question: “Do we need the space that we have now?” says Ong.
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The other question that everyone asked themselves when it came to WFH was: Where can I work from? “I can work from my room at the study table,” says Ong. “But I didn’t want to be cooped up in the room for 10 hours. So I opened up two barbeque tables: I placed one overlooking the garden; and the other, I put a tablecloth over it, and added some flowers. It’s where I work every morning so that I can look out into the greenery. If it gets too warm, I would move inside.”
That has also made Ong think about the importance of having a dedicated home office. “This is something that could be built into future homes,” says Ong. With a lot more people WFH, Internet connection has also become a concern. “A lot more people are complaining that their Internet connection is slow, especially those living in Punggol and Sengkang,” she adds.
The Covid-19 pandemic has also made more people think about biosafety and the importance of fresh air intake for air-conditioning in the design of buildings, reckons Ong.
In fact, the role of space and real estate industry will change dramatically, she adds. “It’s across all sectors — office, hospitality and logistics sector. The whole supply chain needs a rethink.”
Another key concern is the density of cities given the global pandemic, adds Ong, who is also the chair of Singapore for the Urban Land Institute. “How can we build cities of the future, to minimise the impact of another pandemic?” she says.
Property valuations are bound to be affected by the Covid-19 crisis, but the extent remains to be seen. “Property prices tend to be sticky on the way down,” adds Ong. “We have to see transaction volume come down for a while before prices start to come off.”
Based on Edmund Tie’s research, new home sales fell 8.8% from 4Q2019 to 1Q2020. Resale transactions were down 24% q-o-q over the same period. “On average, that’s about 16% to 17% down,” says Ong. “But it was only in the second half of March that transaction volume dropped. April sales are going to be affected, and the full impact will be seen only in 2Q2020.”
Even when the circuit-breaker is lifted, Ong does not expect buyers to rush in just yet. “We have investors looking for opportunistic buys,” she says. “But they are likely to wait and see, while owners are still holding on.”
There will be some owners who will be under pressure to sell their property. “These are businessmen who may be facing margin calls on their stocks, or they need cash flow for their business,” says Ong. “That’s why you see some distressed sales of landed homes.”
In the commercial sector, there is a six-month reprieve on rents. “The general feeling is that the government is helping all businesses to pull through,” adds Ong. “Inevitably, there will be casualties, especially among those who do not have a good business infrastructure in place or have issues with cash flow.”
Ong sees this crisis as “creative destruction”. She adds, “The Covid-19 outbreak has been a great equaliser — it has shown us how connected we are socially and economically.”
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Despite the circuit-breaker measures, luxury bungalow specialist KH Tan, managing director of Newsman Realty, continues to be very active. He goes to bed at 8.30pm and is awake between 2am and 3am. His morning routine includes two hours of meditation, playing the guitar and his daily walk. “I go for a walk in Punggol Park at 4am and it’s very quiet in the morning,” he says. “But of course, I must wear face mask too.”
Tan’s day is packed. “I paint, I sing, I play the guitar, I walk, I cycle, I play basketball with my son,” he says. “I used to exercise once a day, but now I exercise three times a day – when I go and ‘tapau’ my breakfast at 6am, lunch at 11am and dinner at 4pm. I make sure I go very early to avoid the crowd.”
During the course of the day, Tan finds time to handle calls from his clients seeking advice. “I had more than 30 calls last week,” he says. “I have a lot more calls to answer.” Although Tan claims he is “low-tech”, he is still able to provide site plans, floor plans, and pictures or a video of the property that he has shot himself. He sends these to his clients via WhatsApp.
The challenge in getting deals done is not just the circuit- breaker in place, but also the market uncertainty. “The situation is different every week,” says Tan. “The virus is affecting the whole market and the whole world seems to have shut down. People have to stay home and the question is whether the lockdown will be extended. And nobody knows how long this outbreak will last.”
For instance, three weeks ago, it seemed that a lot of people were in a buying mood, says Tan. “After being confined at home for more than a week, their thinking has changed.”
Tan currently has three Good Class Bungalows (GCBs) where negotiations are still underway. Some of the buyers are already familiar with the location and the site. “As these buyers are looking to redevelop the property, they are not so interested in viewing the bungalow,” he says. “So they just need to view the site plan. During their ‘tapau time’, they can drive by to look at the property.”
He points to the coveted GCB neighbourhood of Nassim Road, Cluny Road and Cluny Park. One of the GCBs Tan is marketing is located near Singapore Botanic Gardens. “It is a beautiful plot of land,” he says.
Before the Covid-19 outbreak, the seller’s asking price was $40 million. The market value is $35 million, and the owner is now willing to sell at $32 million. Since the price adjustment, Tan has received three offers for the property.
“There’s still demand from two types of buyers. The first group of buyers are hoping for a real bargain — 30% below market value; and in the second group, foreigners who have become Singapore citizens and want to buy a GCB or those looking to upgrade,” says Tan. The second group of buyers — those looking to purchase for their own residence — are also looking for a bargain, he adds. “Their offers are also 10% lower compared to three months ago.”
Since the Covid-19 outbreak, and especially after safe-distancing measures were put in place, more than 50% of the sellers have withdrawn their property from the market. “These are bungalows that are tenanted or where the owner is currently staying. They want to avoid having people come into the house,” says Tan. “So they want to wait until after the circuit-breaker is lifted, before they decide whether to put their property on the market again.”
However, he believes that crisis always creates opportunity. “Now is the best time to look at your finances and to understand the market, so you’re able to decide on an opportunity quickly before the market bounces back,” adds Tan.
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