SINGAPORE (EDGEPROP) - In the landed property market, especially the luxury bungalow segment such as Good Class Bungalows and waterfront villas in Sentosa Cove, the Covid-19 outbreak has made owners a bit more hesitant to open their doors to prospective buyers.
“The issue we sometimes face is in arranging for viewings,” says Bruce Lye, managing partner of SRI. “Some tenants or owners may want to reschedule the viewing to a later date, especially if they find out that the potential viewer is from China.”
Not surprisingly, activity in the landed property segment for the first two months of 2020 has been more muted compared to 1Q2019, even though uncertainty over Brexit and the US-China trade issues had clouded the market then. “The Covid-19 [virus outbreak] has resulted in knee-jerk reaction for a few weeks,” observes Lewis Cha, executive director of List Sotheby’s International Realty. “But confidence seems to be returning as evidenced by the strong take-up at recent new launches.”
At Luxus Hills, 25 (64%) out of 39 units released for the final phase of completed terraced houses were sold, according to listed property developer Bukit Sembawang Estates in a release on Feb 22.
If the caveats for the sales at Luxus Hills are lodged, the transaction volume in 1Q2020 could match the level in 1Q2019, points out Han Huan Mei, director of research at List Sotheby’s.
Market sentiment could improve and sales momentum is likely to pick up from 2Q2020 onwards if the Covid-19 outbreak could be contained by end-March, notes Sotheby’s Cha. On the other hand, if other countries are still fighting Covid-19, the prevailing cautious sentiment could be prolonged, he adds.
Owing to the scarcity and status symbol, interest in landed property continues to be “healthy”, especially for GCBs, says Cha.
Some property agents have decided to roll out bungalows in established housing estates that appeal to Singaporean families, for instance Dunearn Estate in prime District 11 (See story: Three-storey detached house in Dunearn Estate for $12.8 mil); Sunset area in District 21 (See story: Homely charm, quiet surroundings and plenty of space in a Sunset Way); and the Upper East Coast neighbourhood of District 16 (See story: Rare Parbury Avenue bungalow for $14.5).
The sellers have something in common: They are predominantly retirees looking to downsize as they feel the house is now too big for them. Most had purchased the house some years ago, when their children were growing up and they needed more space. Others had their elderly parents staying with them and needed a house that could accommodate a multi-generational family. There are also those who wanted to enjoy the space.
However, when the children have grown up and have either gotten married or moved overseas, and age is catching up, the owners find that they no longer need or want to maintain such a big home. Therefore, they decide to sell the property and to downsize. “This trend is likely to continue as more people are aware of the need to have adequate funds for their retirement years,” says List Sotheby’s Cha.
On the other hand, it is such properties that provide an opportunity for the next generation of buyers who aspire to upgrade to a bungalow and want a bigger home for the sake of their children, adds Cha.
As the new supply of landed homes is very limited, most of the transactions will involve such resale properties. Caveat data shows a stronger sales volume in 2017 and 2018 when the market was in recovery state, notes Sotheby’s Han. In 2019, sales momentum slowed down due to a weaker economic environment, and sales volume contracted by more than 30%.
From 2017 to 2019, while prices of semi-detached and terraced houses remained relatively unchanged, prices of detached houses grew 10%, points out Han. “Assuming the landed market in 2020 will move at a similar pace with 2019, we do not expect any significant price correction as most of the owners have the holding power,” she says. “The median prices of detached, semi-detached and terraced houses are expected to remain stable at around $10 million, $4 million and $3 million respectively.”
Check out the latest listings near Dunearn Estate, Parbury Avenue, Sentosa Cove, Luxus Hills, Sunset Way, MRT Stations and Schools
For price trends, recent transactions, other project info, check out these projects' research page: Dunearn Estate, Parbury Avenue, Sentosa Cove, Luxus Hills, Sunset Way
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