Considering the events that marked the first half of this year, it’s no secret that the real estate market is not doing so well. Demand for new homes went down in a significant manner, plus developers had to stop or delay any launches they had planned because of social distancing rules and restrictions. Thus, it was quite a surprise to notice that the price of private homes managed to record a slight increase after the rather difficult past months. More precisely, the prices of homes from the private sector enjoyed an increase of 0.3% in the second quarter of this year.
Now that we learned how to deal with the threat of the virus in a safer manner and we slowly started to resume our lives, we also began looking for new homes, if this is what we had in mind previously to the pandemic. So, this increase in demand drove the prices of private residences up. However, there aren’t very many new launches in this sector, which implicitly affects the volume and value of sales. Also, the recovery of the real estate market is yet to be trustworthy, in spite of the recent increase in prices, as the effects of the pandemic left scars on the entire industry. Even if the demand for new homes grew, bringing prices slightly up, it is still too early to celebrate recovery.
Considering that the past month recorded a decline in prices of 1%, it’s no wonder the new rise brought smiles on the faces of many that run businesses in this domain. Without a doubt, the rise recorded in the second half of June was due to the fact that viewings were once again allowed and show-flats started to be available for potential homebuyers. Still, experts say that this rise could be only temporary, as they could go down in the second half of the year if the tentacles of the economic fallout continue stretching. According to Singapore’s head of research at Colliers International, Ms. Tricia Song, the recorded rise featured an uneven aspect, since it was triggered by the price of non-landed residences located in prime zones. When it comes to these residences, the increase was a whopping 2.7% in Q2, compared to the 2.2% decrease recorded in Q1. In other words, we still need to wait and see what happens, as this price rise may be ephemerons, considering the unprecedented events controlling the market this year.
The number of newly launched private homes was also smaller during this period, as developers placed on the market only 1,852 private residences that were incomplete as well. This compared to the 2,093 homes launched in Q1. The value of sales in the second quarter was also smaller than the sales recorded in the first quarter. Thus, in Q2 sales recorded a drop of 20.3%, as a result of restrictions and regulations adopted during the months of April and May. But once home reopening took place in the second half of June, both demand and sales enjoyed a welcome increase. Even so, we should expect going through the roughest year from the last decade, as the toll of the pandemic on the economy and real estate market will continue to be felt for a while.
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