In spite of limits placed by the Circuit Breaker time frame during the most of Q2 2020, pent-up demand pushed the local real estate market to rebound when sales galleries reopened in June, said a PropertyGuru report.
Based on the market index of Q3 2020, Q2 eventually ended with a slight gain, recording a 2.15% uptick to 111.9 points. In view of this, PropertyGuru’s Supply Index witnessed a record-high spike of 46.39%, caused by a group of sellers in the resale market who are interested to sell off their properties.
The second quarter concluded with 162,069 listings, as compared to 110,710 in Q1 2020. The 51,359 jump in numbers showed a peak in supply which surpasses all earlier quarters’ figures since records started in Q4 2016, declared the report.
It added that there was relatively more new launch condominium units sold in Q2 too, like units from Dairy Farm Residences, as several buyers expect the economy to rebound by 2022 to 2023 when majority of these new developments are projected to complete.
These trends are aligned with the Urban Redevelopment Authority’s (URA) data, which recorded a 0.3% price jump in the private housing market in spite of previous estimates of a 1.1% decline in the property price index.
In the mean time, PropertyGuru’s Price Index displayed that condominium prices increased marginally by 2.15% to 111.9 Quarter on Quarter (QoQ). “But the basis of the apparent uptick in the price index is an anomaly that should be brought to attention, as the percentage of resale properties sold in the last quarter is significantly less (only 35% of the total),” added the report.
This is probably due to the stoppage of physical viewings that has a bigger impact on completed homes than new projects. Sales galleries like the Clavon Showflat are already set up with virtual tours to overcome the need for viewings. The quarterly average percentage of resale transactions to total transaction volume (sub sale, new sale and resale combined) for the preceding 4 quarters is at 46.9%.
“Therefore, it is our opinion that the primary market numbers have buoyed the general price index in spite of considerable rate pressures faced by the resale market,” said PropertyGuru.
It further stated that only 7 out of 28 districts, namely 9, 10, 8, 13, 22, 17 and 28, recorded a drop in property rates over the second quarter.
The median per square foot asking rates in River Valley and Orchard returned to the list of districts with the most severe price drops. PropertyGuru predicts these regions to experience more headwinds in the coming months with significantly larger supply figures.
“At this stage, it seems that the man on the street has yet to be affected by the complete brunt of COVID-19’s economic effects as the government stimuli resume to prop up employment and businesses numbers. But as discretionary spending drops and household purses tighten, the next few months of sales data might experience phased trimming or even need an extension of the temporary relief measures for the real estate market,” added the report.
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