After increasing for three successive quarters, Singapore’s private residential home prices dropped in the first quarter of 2020, as a result of effect of Covid-19 on the market.
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The quarterly fall in costs was around the board, together with the landed section posting a 1.7% quarter-on-quarter fall and the non-landed residential department a 1.0% decrease.
Around the regions, the Core Central Region (CCR) saw prices drop 1.5% quarter-on-quarter at Q1, slower compared to 2.8% decrease in Q4 2019.
Song said the reduction in Q1 non-landed CCR costs”could be due to chosen launches offered at perceived reductions”.
This is lower compared to the 2,934 psf median price attained at neighboring Midtown Bay at Q4 2019.
The 26-unit Enclave in Holland, that was established as July 2018, transferred 14 units in Q1 in a median cost of $1,851 psfdown from the prior costs of units sold at $2,500 to $2,600 psf.
Home prices in the remainder of Central Region (RCR) dropped 0.5% quarter-on-quarter at Q1, after falling 1.3% in Q4 2019. The External Central Area (OCR) also observed personal home prices decrease 1.0% quarter-on-quarter, reversing the 2.8% increase found in Q4 2019.
Song noted that trades tapered off sharply in March from the previous month, since the consequences of Covid-19 started to”reverberate throughout the market and hurt belief”.
“According to caveats downloaded 1 April 2020, developers offered 528 new houses (excluding ECs) at March 2020down sharply in the 947 units in February.
And with GDP exceeding -2.2% year-on-year in Q1, police also anticipate the city-state to venture into its first recession in two years, putting 2020 expansion in between -4% and -1%.
In light of the economic downturn, Colliers anticipate personal residential costs to decrease by 1% to 3% in 2020.
But it doesn’t anticipate prices to”drop up to the 25% over Q2 2008 into Q2 2009 because of this Global Financial Crisis (GFC) because there were uncontrolled speculation and loose charge before the GFC”.
“The two rounds of land cooling steps in 2009-2018 have reined in speculation and cost increases over the previous 3 years have been more renewable, in our view,” said .
Colliers anticipate developers’ earnings for this season to fall into 8,000 units, in comparison to 2019’s 9,912 units.