Singapore property market rises 2.2% in 2020; Resale transactions surge 20%

The global economy has been affected by the Covid pandemic, but Singapore’s property market has remained stable. According to the latest property market report released by Urban Redevelopment Authority (URA), private residential property index rose by 2.2% in 2020; prices of non-landed homes rose in the 4th quarter by 3%; up 2.5% in 2020 as a whole.

Private home transactions in 2020 was 9,982, which was similar to that of 9,912 transactions in 2019 (Figure 1). The number of transactions in the resale market rose by 10,729,  an increase of 20% from the 8,949 transactions in 2019 (Figure 2).
(Figure 1)
 (Figure 2)
Looking back at the 2nd quarter of 2020, in order to control the pandemic, Singapore implemented a ‘circuit breaker’ in the city for close to 2 months, which resulted in a sharp decline in the resale market. Private residential property index fell slightly by 1.1% in the 2nd quarter. With a number of “blockbuster launches” likely in the luxury and city fringe areas, demand for new homes might pick up further this year, boosting the property market.
Centaline Property Singapore’s general manager David Hui, said: “According to the buyers’ profile in the transaction figures, about 82% of the transactions last year were Singapore citizens, and about 17% were Singapore permanent residents and foreigners (Figure 3). Transactions were concentrated in the non-central areas, mainly for the mass market properties. Core central areas which have great potential for investment are still mainly purchased by foreign buyers.”
(Figure 3)
Foreign buyers have always been fond of properties in the core central region, which includes the financial district and Orchard Road. Last year’s transaction volume from foreign buyers dropped by about 3%, as compared to 2019. Though there is not a need to be in Singapore in person when purchasing a new home for foreigners, investors in Hong Kong are still hoping to learn more about the property details and be there in person before purchasing a new home.
Centaline Property Singapore’s general manager David Hui expects private home prices to edge up on the prospect of Phase 3, eventual easing of border control measures as well as positive news around Covid-19 vaccines.
In recent months, non-landed property market has rebounded strongly. As of the end of 2020, the supply of properties approved for development totaled 49,307 units, with only 24,296 units remaining for sale (Figure 4). The number of supplies fell for two consecutive years at the peak of 2019, but the government’s land sales plan for the past year has been affected by the pandemic. It is expected that this year’s land transactions and the resale market will be more positive than last year.
 (Figure 4)
Centaline Property Singapore’s general manager David Hui, said: “Singapore’s pandemic prevention in the past year has achieved significant results. Economic indicators such as unemployment rate and GDP have shown signs of stabilizing, which have a relatively positive impact on the local economic recovery. In addition, under the global quantitative easing of asset prices, Singapore’s private residential market is more active. It is estimated that Singapore’s property prices will increase by about 5% in 2021 and new home transaction volume may reach 10,000 to 12,000.”