Closure of project sales galleries and circuit breaker for property agents extended beyond June 1

By Valerie Kor and Cecilia Chow / EdgeProp Singapore | May 22, 2020 12:07 AM SGT
The Multi-Ministry Taskforce announced on May 19 that safe reopening post-circuit breaker will take place in three phases from June 2. Phase One of the safe reopening will involve economic activities that do not pose high risk of Covid-19 transmission. Businesses that will resume in Phase One include all hairdressing services, selected health services, motor vehicle and air-con servicing. The first phase of reopening is expected to last for four weeks and will see a third of Singapore’s workforce returning to work, and schools gradually resuming.
Developers’ sales galleries set up for marketing and selling properties “shall remain closed until further notice”, according to a URA circular on May 20. This means that marketing and sales activity can only continue on virtual platforms.
Project sales galleries are in the same category as car showrooms, which are also not allowed to resume operations from June 2, points out Tan Tiong Cheng, senior adviser to Knight Frank Asia Pacific who retired in April this year.
“Everybody wants to get back to normal, but the government’s fear is the likelihood of a second wave if we reopen too quickly,” observes Tan. “This is a calibrated reopening with Phase One comprising mainly essential businesses.”
Developers' sales gallery and showflats have to remain closed until further notice (Photo: Albert Chua/EdgeProp Singapore)

‘Sentiment dampened, expectation heightened’

The extended closure of sales galleries beyond the “circuit breaker” period could “further dampen sentiment,” says Lee Liat Yeang, senior partner of Dentons Rodyk & Davidson. “But at the same time, it could heighten expectation of their reopening in the near future.”
Lee is of the view that the authorities should allow “a limited opening and operation of developers’ sales galleries”. Restrictions could be imposed on the number of people per group to “no more than six persons, including the real estate agent”, he suggests. “Depending on the scale of the sales gallery and number of showflats, viewings could be staggered and limited to two-hour time slots,” he adds. “Of course, all must wear masks with safe distancing and regular cleaning must be carried out.”
Indeed, the extended closure of sales galleries and showflats “will add another level of uncertainty for property developers and marketing agents,” says Nicholas Mak, head of research & consultancy at ERA Realty. “Although a lot of positive things have been said about using technology, developers still want a big bang for their new launch, especially for mass market launches, where some developers have organized carnivals and activities for families”, he adds. “They want to make a splash in their initial launch sales. But now, developers have to cool their heels for a while longer.”
Meanwhile the circuit breaker period has been extended for property agents too. In the GoBusiness Covid-19 government website, under the “Resumption of Business Activities from June 2”, it says that “Property agents are not permitted to have face-to-face meetings with clients, except where clients’ physical presence is legally required to complete transactions”. In such situations, meetings must take place in the office of the real estate company. It also adds that property viewings “are not permitted to be conducted in person”, but may be conducted through electronic means.
“Initially, I was a bit disheartened when the announcement was made,” says Ismail Gafoor, CEO of PropNex. “A lot of agents were looking forward to the circuit breaker being lifted so they can meet their clients face to face and carry on with their transactions, particularly those in the resale market. Unfortunately for real estate industry, the circuit breaker has been extended by another month.”
However, Gafoor concedes that the authorities are doing this “for the greater good”. He adds, “Their concern is that sales galleries could become a potential cluster if you have consumers and property agents congregating, and if they allow property viewings in the resale market to resume. I can respect that.”
The extended closure of sales galleries and showflats could dampen sentiment, but heighten expectation of their reopening (Photo: Albert Chua/EdgeProp Singapore)

Digitalisation in real estate to accelerate

Social and entertainment activities that carry higher risk will remain closed. People are encouraged to stay home except for essential activities. Retail outlets, F&B services, gyms and fitness studios will be allowed to reopen in Phase Two, which might last several months, according to the government announcement on May 19.
The third phase will see social, cultural, religious and business gatherings resume with limits on group sizes until a vaccine is found. Currently, Covid-19 infection numbers in Singapore are still high, even though the cases among Singaporeans and PRs have fallen to less than five a day, adds the government.
Christine Sun, OrangeTee & Tie head of research and consultancy, expects the extended closure of sales galleries to “further quicken the pace of digitalisation in the real estate industry”. Based on ground observation and agents’ feedback, buyers seem to be more receptive to virtual house viewings now. As circuit breaker rules extend beyond June 2, she believes that “online viewings could soon be the norm.”
However, more needs to be done, says Sun. “While the industry continues to digitalise, the authorities and lawyers will have to look into the legal aspects of some of these virtual processes to ensure that they are legally binding,” she adds. “This is especially since the agents cannot explain the clauses to buyers physically.”
Virtual viewing and marketing via social media platforms however, “cannot replace viewing of the actual property or showflat”, says Dentons’ Lee. “Buying a property is a very huge financial commitment which should be preceded by a careful consideration of the physical attributes of the property, including what are ancillary to, or surrounding the property.”
Most property developers and property agencies have already ramped up their digital marketing efforts through virtual showflat tours and online sales presentations to potential buyers (Photo: EdgeProp Singapore)

Silver lining in virtual platforms

Nevertheless, most property developers and property agencies have already ramped up their digital marketing efforts through virtual showflat tours and online sales presentations to potential buyers.
When sales galleries are allowed to open, Joan Chang, marketing director of Macly Group, says it will be mandatory for all salespersons to wear masks at all times at the sales galleries of The Iveria at Kim Yam Road and Tedge on Changi Road. Hand sanitisers and masks will be provided for buyers, if required, while, temperature taking, SafeEntry contact tracing systems and waiting areas are “on standby and ready to roll out”, she adds.
The area of “stress” for property developers will be those with projects that are ready to kick off, notes PropNex’s Gafoor. “Many of the sales galleries still need to get approval from the Controller of Housing before the developer can launch,” he explains. “Some of these sales galleries are mid-way through construction or waiting for the final touches to be added. And with the current foreign workers’ situation, even contractors are not clear as to when they can resume construction. Therefore, I do foresee that some of the new launches will be delayed as long as the showflats cannot be completed on time.”
There is, however, a silver lining as far as the virtual marketing platform is concerned, says Gafoor. “I’m pleasantly surprised that more and more people are used to the virtual decision making process, and my agents are also more confident in using the online platforms,” he adds. “In just the first two weeks of May, PropNex closed more than 110 new home sales. There has been a steady increase in sales over the past six weeks of the circuit breaker. I won’t be surprised if May rings in as many new sales as April, and if June’s sales is even higher.”
While face-to-face meetings are still not allowed except at closing in the real estate agency office, agents can now go down to vacated or empty properties to conduct viewings and take pictures or videos of the property on their own (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Resales could revive after June 1

Bruce Lye, managing partner of SRI sees many agents adapting to virtual marketing of property. The game changer will be to the resale market from June 2, he says. While face-to-face meetings are still not allowed except at closing in the real estate agency office, agents can now go down to vacated or empty properties to conduct viewings and take pictures or videos of the property on their own. “During the circuit breaker period, the challenge was that property viewings were not allowed,” he explains. “This was especially difficult for secondary sales of apartments, condominiums and even houses where buyers are looking for their own use.”
Prospects can first view these videos and virtual walkthrough online. “This is equivalent to the first viewing of a property,” says Lye. “If the prospective buyer is keen, the agent can even negotiate with them on the price. If it’s acceptable to the seller, a viewing can be arranged. However, the owner of the property will have to make sure that all the occupants have to vacate the property before the prospective buyer’s visit so that there will be no face-to-face meeting.”
Whilst onsite, the prospective buyer can link up with the agent on a video call, if he wants a guided tour of the actual property and has questions. If the buyer is serious about going ahead with the purchase after the viewing, the cheque collection and option to purchase issuance can be done via courier service. “Alternatively, the agent can arrange to meet the buyer and the seller separately at the SRI office,” adds Lye. “The measures after June 1 allow us to meet the buyer and the seller at the critical juncture – the concluding of the sale. This will help the resale market.”
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