Singapore’s private home prices drop 1.2% q-o-q

SINGAPORE (EDGEPROP) - Private home prices have declined 1.2% q-o-q, registering its first quarterly decline since 1Q2019 — despite banks revising home loans to attract borrowers, highlights real estate consultancy Edmund Tie in its 1Q2020 property market overview.

The residential market has been muted, and is likely to remain so in the short term in a weak job market, it says. The closure of sales galleries is expected to further dampen demand amid the government’s extended “circuit breaker” measures.

Overall, all real estate sectors have been hit — transactions have also fallen across investment sales, office, industrial and retail.

Investment sales hit $3.3 billion in 1Q2020, down 34% from the $5 billion transacted last quarter. This was before the “circuit breaker” was implemented.

Although the private sector was the primary driver of investment sales in 4Q2019 — accounting for 95.3% of total investment sales — it only accounted for 52.6% in Q1 this year.

Transaction quantum has also fallen: from 14 transactions exceeding $50 million in 4Q2019, to only four such transactions in 1Q2020. Two of these stemmed from related party transactions: Cross Street Exchange (formerly known as China Square Central) and Alexandra Technopark transacted at $648 million and $606 million respectively, and were transactions between Frasers Commercial Trust and Frasers Logistics & Industrial Trust.

However, five successful tenders from the residential Government Land Sales (GLS) programme contributed $1.4 billion, an increase from only one successful award in 4Q2019.

The office sector has remained subdued. Although occupancy rates of office developments trended upwards in Singapore by 0.4% points q-o-q to reach 98.4%, this was primarily due to leases that were concluded in earlier periods, says the firm.

Further downward pressure on occupancy rates, rents and net absorption is expected.

Although retail showed tentative signs of recovery in 4Q2019, the industry is now hit by lower footfall from locals and tourists. Establishments in Chinatown, a prominent tourist destination, had reported sales going down by as much as 80% in February, while business in Jewel Changi Airport contracted by as much as 70% in the same month, Edmund Tie observes.

In contrast, demand for e-commerce has surged. In February, online retail sales accounted for 7.4% of total retail transactions, up from 5.5% in January.