Singapore

The slight growth was driven by the price increases in RCR and OCR. Alongside surging transaction volumes, private home prices also defined the negative impact brought on by COVID-19. According to the URA’s latest statistics, the island-wide price index of non-landed private residential properties inched up by 0.1% QoQ in Q3/2020. By market segment, the overall price growth was fuelled by the rest of central region (RCR) and outside central region (OCR), which posted quarterly growth of 2.5% QoQ and 1.7% QoQ respectively. Relatively higher prices achieved in newly launched projects compared to the vicinity was the main reason behind the increase. In contrast, prices in the CCR experienced a contraction of 3.8% QoQ. Lower prices in resale transactions, together with limited new sales, could be blamed for the price drop in this market segment. The average prices of high-end non-landed private residential projects in Savills’ basket also fell in the reviewed quarter, though at a much moderate pace of 0.2% QoQ. Year-to-date, prices registered a marginal 0.9% decline. The decline should also be seen in the context of a limited number of transactions, inferring that the sellers in our basket of high end non-landed properties are not under great duress to offload their properties. Supply Based on the data released by the URA, there was a total supply of 50,369 uncompleted private residential units in the pipeline with planning approvals in Q3. About 52.6% of this pipeline supply, or 26,483 units remained unsold at the end of Q3/2020. This is about 5.3% lower than the 27,977 in the previous quarter.  

It’s a reversal from a four-quarter decline which began in Q3 2019. The uptick was mainly lifted by an uptick in strata sales for multiple-user factory and warehouse properties, such as Mega@Woodlands and Oxley Bizhub. The demand could have come from firms, particularly in printing as well as event organising, who are downsizing their real estate footprint. Furthermore, Savills notes that some companies in healthcare and the aquaculture industry (i.e. frozen seafood) are also looking to acquire larger facilities to support their business expansion as the pandemic has benefited them. Although there is a growing buying interest among automotive players, especially when there are more single-user factories up for sale, most of them did not translate to actual sales as the prospects are still waiting for better offers before the lease expiry of their current premises. Here’s more from Savills: While some owners maintained their price expectations, particularly for freehold assets, data from JTC showed that overall industrial prices fell by 2.2% QoQ in Q3, making it the largest decline in the last four consecutive quarters. Similarly, Savills’ basket of leasehold industrial properties also continued to register declining prices in Q3. Prices for 60-year leasehold properties fell at a moderate pace of 0.9% QoQ to S$425 per sq ft, while that for 30-year leasehold properties fell by 2.2% QoQ to S$301 per sq ft due to depleting lease terms. As there is a scarcity of freehold industrial stock available currently, especially in prime locations, freehold industrial prices held firm, recording a marginal rise of 0.2% QoQ to S$694 per sq ft.  

New metrics like technology obsolescence and energy balance are emerging. For many companies reassessing their office space amid the rise of remote working, the focus on employee wellbeing and the need to reduce overheads, the old metrics they used to measure how well workplaces perform are no longer enough. Today, metrics that go beyond the traditional space per person or space per desk are being sought so companies can better understand and compare how different offices across a portfolio are really faring – and what needs to change to better position their real estate for the long road ahead.

The workplace-related changes will boost demand for conference halls, convention centres as well as CBD/Orchard Road retail.

Over four in 10 developers are changing designs that were once considered complete.

The e-commerce boom is one of the major growth drivers.

The overall regional volume declined by almost 40% in Q1 2020 at US$117bn.

Sales from the Rest of Central Region and Outside Central Region continued to dominate this month. Since the opening of showflats from 19 June onwards, Knight Frank notes new sales volume in the private residential market has been steadily increasing each month fuelled by pent-up demand. From 998 units (excluding Executive Condominiums (ECs)) in June, to 1,080 units in July, new homes sales in August totalled 1,256 units, an increase of 16.3% from July and 353.4% from the 277 developer sales in April, which accounted for the lowest monthly volume in 2020 due to the start of the circuit breaker (CB). New home sales in August 2020 was also 11.8% higher than the 1,123 monthly sales in August 2019, and just shy of the highest monthly volume last year comprising 1,270 units in September 2019. Leonard Tay, Head, Research, Knight Frank Singapore, says the Hungry Ghost month did nothing to halt the gaining momentum from “needs-based” purchasers who sold their properties and are now in need of a new home and those getting married. Other buyers whose jobs are not at risk and have substantial savings, could have also purchased a new home for fear of missing out. HDB homeowners who have recently completed their five-year Minimum Occupation Period (MOP) in BTO Flats, could have sold their units and used the gains to upgrade to new condominiums. Here’s more from Knight Frank: Sales from the Rest of Central Region (RCR) and Outside Central Region (OCR) continued to dominate in August with 622 sales and 506 sales respectively, as both new and previously launched projects posted brisk sales. New sales were bolstered by the newly launched project Forett At Bukit Timah in the RCR. One of the first large-scale developments to be launched after the lifting of the CB measures, the 633-unit freehold development in District 21 was the top selling project with 213 units or 34% of the project snapped up during August, attesting to the pent-up demand still evident in the market. Sales have also picked up in earlier launches like The Garden Residences in the OCR and The Woodleigh Residences in the RCR, both of which overtook Jadescape to be among the top five best-selling projects in August. The freehold development Noma, which launched at end-August in the RCR, moved 34 units this month at a median price of S$1,639 psf. Even with buyers’ attention turned towards the RCR and OCR, developer sales in the CCR saw its third consecutive month of uptick. New launches in the CCR included the boutique project Mooi Residences (July 27), which sold its first three units at a median price of S$2,566 all to Singaporean buyers. There were 1,582 units launched in August, almost twice the 869 units launched in July, and more developers will gear up to launch their projects in the remaining months of 2020. Even though new sales volume in the private residential market has been strong in the few months after the circuit breaker, sales momentum for the rest of 2020 might stabilise in the remaining months of 2020. Year 2020 could now end with about 7,000 to 8,000 new home sales in the private market. This is higher than Knight Frank’s previous estimated projection of 6,000 to 7,000 new sales made during the circuit breaker.  

The USD11.7b worth of transaction volumes in Q2 reflect fundamental strengths in some APAC markets.

Rents are expected to grow by between 3.3% and 2.2% on average per annum for the next five years.

3 in 5 real estate sectors saw values decline in the first half of 2020.

An estimated 1,052 condos were resold in August, up 7% from July. According to PropNex, the private condominium resale market is re-invigorated and appeared to have made a full recovery from the slowdown during the circuit breaker. SRX reported that an estimated 1,052 resale condos were transacted in August - an increase of 7% from July and the highest monthly sales volume in two years. The mass market or Outside Central Region (OCR) accounted for nearly 60% of resale transactions in August, fuelled by demand from HDB upgraders and the owner occupiers. Here’s more from Wong Siew Ying, Head of Research and Content, PropNex: We also note that the sales of 1,052 resale private homes in August 2020 also trumped the 1,003 units resold in the entire Q2 2020, according to figures from SRX. The spike in resale volume last month was not unexpected as pent-up demand from the 10-week circuit breaker and phase 1 period continued to come into the market. Given the lacklustre economic outlook and market uncertainty, some buyers may have perceived it to be a good opportunity to negotiate for a better pricing. Based on our observations, Q2 2020 – being the quarter where the circuit breaker and phase 1 period were imposed – was probably the low-point of the resale market. The upturn in sales in recent months likely signalled that the worst is over, paving the way for resale market activities to return to normal. With more than 5,000 resale condos sold in the first 8 months of 2020 based on SRX data, we expect total resale volume to likely reach 7,500 to 8,000 units this year – a tad lower than 8,949 units resold in 2019; but still very a respectable number in view of the massive disruption from the pandemic. Despite the rise in demand, resale condo prices in August remained largely stable, inching up by 0.4% over July. Both the Core Central Region (CCR) and Rest of Central Region (RCR) saw a marginal resale price increase of 0.3% month-on-month (MoM) in August, while in the OCR – which is supported by a larger pool of buyers – witnessed a 0.5% MoM increase in resale prices. We would expect resale prices to be relatively flat in the coming months, as the gloomy economic prospects and muted sentiment weigh on sellers’ ability to raise asking prices substantially. In addition, buyers are likely to be cautious and prudent in their purchase, mindful of potential downside risks ahead, including the weaker hiring market.  

Nearly 1 in 2 leaders expect to rationalise their portfolio and decrease their total footprint.

Data released by the SRX showed that the HDB Resale market continued to gain ground with brisk sales and firmer prices in August.

Island-wide rents were also down 1.2% QoQ, led by the landed segment.

But volumes rose 17% QoQ due to a pick-up in Shanghai, Beijing and Singapore.