Despite recession, Singapore’s property market surprises again with stellar new private home sales in December

• URA data showed that 1,217 new private homes were sold in December, the highest figure for the month since 2012
• Property experts said the strong showing across the property market was remarkable, given Covid-19 and the recession
• For all of 2020, more than 10,000 new private homes were sold
• That had not happened since property curbs were introduced in July 2018

SINGAPORE — The country may be going through its worst ever recession, but Singapore’s property market, which has repeatedly surprised observers with its continued growth in prices and sales transactions, has recorded another batch of upbeat data.

According to figures released by the Urban Redevelopment Authority on Friday (Jan 15), a total of 1,217 new private homes, excluding executive condominiums, were sold in December, its highest level for the month in eight years.

The total was exceeded only in December 2012, when 1,410 units were sold.

While the last month of the year is typically a quiet month for the market, the number of private homes sold jumped by 57.2 per cent compared to the month before.

Compared to December of 2019, the number of units sold shot up by 126.2 per cent.

For the whole of 2020, a year fraught with huge disruptions wrought by the Covid-19 pandemic, a total of 10,024 new private homes were sold — a 1.1 per cent increase from the 9,912 sales in 2019.

“This was beyond any conventional expectations one might have had during the circuit breaker in April to May last year, when economic uncertainty and an inevitable recession seemed to have stopped activity in the private residential market,” said Mr Leonard Tay, head of research at property consultancy Knight Frank.

Mr Ismail Gafoor, chief executive officer of property agency PropNex, said that annual new home sales had not previously surpassed 10,000 units after the introduction of property curbs in July 2018, which halted the momentum of the market then.

“For this to happen in 2020 – a year fraught with great uncertainties – is a highly credible performance and a testament to the market’s strength,” he added.

Property analysts said the stellar performance in December could be attributed to a few factors.

For one thing, with travel being decimated due to the Covid-19 pandemic, more residents are heading to showflats as they are kept in Singapore.

Low interest rates, as well as an increasing number of owners of Housing and Development Board flats looking to upgrade with their flats reaching the end of the five-year minimum occupation period were other factors cited by analysts.

Ms Christine Sun, head of research as property consultancy OrangeTee, said home buyers sitting on the sidelines are entering the market now as prices are likely to increase this year in line with expectations of a recovery for Singapore’s economy.

The positive sales in December is also a result of the high number of new launches in the month, said Mr Nicholas Mak, head of research and consultancy at property firm ERA.

A total of 1,349 units were launched in December — the third highest number of units launched in a single month for the whole of 2020.

Analysts said that demand for private properties is likely to continue in 2021.

“Looking ahead, the same demand drivers will still apply in 2021; market sentiment is likely to recover slowly, driven by optimism surrounding the nationwide vaccine rollout, stabilisation of the economy and most importantly, low interest rates will help to widen buyer’s affordability,” said Ms Goh Jia Ling, manager of research for Singapore and Southeast Asia at property consultancy CBRE.

While Ms Goh expects 8,000 to 9,000 new homes to be sold in 2021, Ms Sun is more optimistic and is forecasting total sales to come in at between 9,000 and 10,000.