2020 was an excellent year for the private residential sector in Singapore, which, amid the pandemic and weaker economic circumstances, recorded a rise of 2.1 per cent in the fourth quarter, up from 0.8 per cent in the previous three months and 0.5 per cent year on year.
The Housing Board resale market, which saw prices jump 5 percent in 2020, was also a spectacular year – the steepest increase since 2012, when resale flat rates soared 6.5 percent.
The durability of the private property sector – even though unemployment has risen and the economy of Singapore is forecast to contract by 5.8% in 2020 – has prompted recent ministerial remarks that the government is holding a close eye on the market, sparking rumors about further calming initiatives.
Data published by the Urban Regeneration Authority (URA) on Friday morning (Jan 22) revealed that for the entirety of 2020, the price inflation remained unchanged from its flash forecast of 2.2 percent, similar to 2.7 percent rise in 2019. In 2018, rates soared 7.9%.
Analysts claim that if calming steps are to be introduced, it is still too early to call, as there was only one quarter of strong growth, fueled by pent-up post-circuit breaker demand, vaccine optimism, sufficient liquidity and low interest rates.
However, if prices continue to rise by more than 2% for another one to two quarters, the probability of such steps can increase, said Mr. Wong Xian Yang, Cushman & Wakefield.
Meanwhile, developers’ sales of new units dropped 26 percent from the previous three months in the fourth quarter. For the entirety of 2020, though, in a pandemic year, sales of new private homes rose by 0.7 per cent.
The developers sold 2,603 units (excluding executive condominiums) for the fourth quarter of 2020, down from the 3,517 units taken up in the third quarter. For 2020, developers built 9,982 new homes, up 0.7 percent from the previous year’s 9,912 units delivered.
In the fourth quarter, private resale purchases accounted for 61.3 per cent of all revenue, relative to 49.2 per cent in the previous quarter. In the fourth quarter, resale volumes rose to 4,249 units, compared with 3,467 units sold in the third quarter.
Resales rose almost 20% to 10,729 transactions for 2020, compared with 8,949 in 2019.