Since the appearance of the new coronavirus around the world, especially in the eastern world, everything seems to have come to a stop. Or, at least, to slow down, with a trajectory positioned on a downward slope. The same happened with the price and sales volume of private homes in Singapore. Starting in February, both the price and sales displayed decreasing values. Thus, prices recorded a drop of 0.8%, while the sales volume decreased with 13.1%, as stated by the SRX Property’s website. According to the statistics, this month-to-month drop recorded this February is the most significant since October 2016.
But decreases didn’t happen in just one segment of the market. All three sections of the real estate market in Singapore were affected by this phenomenon. The properties belonging to the OCR, outside the central region, recorded the biggest drop, of 1.3% from their former prices. Next come properties found in the rest of the central region, RCR, and those located around the edges of the city, with a price drop of 0.8%. The smallest price decrease was noticed among apartments located in most wanted districts or central region of the city. These are currently facing a price drop of only 0.1%.
However, the specialists watching the phenomenon growing around the appearance of the coronavirus said that such drawbacks are not a surprise. Due to the measures meant to raise awareness regarding COVID-19, those looking for a new home postponed all the plans they had concerning house viewings. So, the deals that may have been landed after all these property views did not happen. This led to fewer house buying deals closed during this period.
It is also believed that some home buyers decided to postpone the moment of buying a Singapore property, thinking that the current situation may help them get better prices. However, it is expected for the situation to return to its normal levels once the events around COVID-19 come to an end. Compared to last year, prices usually went up in the month of February, as homebuyers felt motivated by the coming of spring. But, this year, things changed a little. Compared to the 678 units sold in January, there were only 589 units put up for resale that were sold in February. These numbers show that sales were higher with 10.9% than the month of February of the past year. But it was still 7.7% lower than the 5-year average of units sold in the same period of the year.
Given the uncertainty and reluctance triggered by the appearance of the new virus, it’s no wonder people are not as willing to invest large sums into properties. Of course, the desire to buy homes did not disappear, but more it is postponed until this virus-related situation is gone. This is why it is possible to say that the current decreases in price and sales volume are temporary. How much will the prices go down? This is rather hard to predict because it all depends on how the situation around COVID-19 evolves and how fast things are going to get back to normal.
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