The outbreak of Covid-19 changed, without a doubt, not just the way we live our lives, but also the world around us. The economy became more fragile and unpredictable, and we had to learn to deal with brand new conditions. Thus, considering the precarious state of the economy, the sales of new homes, in general, were expected to drop significantly. However, the private home sector managed to defy the predictions of specialists, continuing its upward trend, despite all odds.
What is more amazing is the fact that the current rises have not been seen for more than two years already. This September was the 5th month in a row when the level of sales was above expected and predicted values. If August recorded a sale of 1,258 of private units, September came with an even higher number, the total amount of units sold rising to 1,329. And all of this happened even though there were very few private home launches, an aspect that was highly affected by the unpredictability of the market in current conditions.
The last time sales of private homes peaked was back in 2018, in July. Due to the announcement of cooling measures regarding the acquisition of new property, homebuyers rushed during that month to complete their transaction and meet the deadline set by the authorities. And other signs are showing that the market is more resilient than we thought. For instance, in September 2020, the sales of private units went up by 4.65%, compared to the same month of 2019. It is worth mentioning that all these numbers, provided by the URA, do not contain the number of executive condominiums. The EC represents a form of hybrid property, as they are a part public and a part private type of housing.
What determined homebuyers to continue investing in private homes, despite the less happy predictions concerning the real estate market and economy? According to analysts, almost 65% of the previously mentioned transactions were made for properties located in the rest of the central region, which means properties around the city’s fringes. In this area, prices are much more accessible, meaning that homebuyers get more for their money if they are willing to give up the convenience of living downtown.
Among the very few new condo launches that took place last month, one stood out from the crowd, recording an impressive number of sales for its units. We are talking about Penrose, the non-landed launch located on Sims Drive. This development sold no less than 389 units, for an average price of $1,541 per square foot, which represented 45% of all sales that were recorded in the city fringe area. However, other developers did well too, The Woodleigh Residences and JadeScape being two of them that are worth being mentioned.
Looking at the discrepancies between the current performance of the economy and prices of homes, as well as the recent sales that beat all odds, specialists wonder if the real estate market will end up evolving as an entity separate from the economy. Or people simply wish to invest their savings and secure their future, even if challenges may come up ahead.
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