Like what happened worldwide, Singapore’s real estate market paused for a while when the pandemic first started. But it remains a coveted market as the country retains its status as the preferred location for global companies looking to take part in Asia’s growth. While this is true for businesses, does it hold with ordinary employees looking to buy their properties in the Lion City?
Even as the Ministry of Trade and Industry of Singapore forecast a full-year GDP contraction of around 6.5 percent, the end-of-year result was better at 5.8 percent. This better-than-expected result came after a phased resumption of activities in the country after implementing the Circuit breaker from April to June. It also benefited from the resumption of economic activities in countries around the world.
Even as 2020 was the worst recession Singapore experienced in its history, it’s expected to recover in 2021 gradually. But this recovery is dependent on several factors, including the recovery of the global economy, the lasting effects of the pandemic, and the recovery of some sectors in Singapore’s economy.
The recovery of the global economy remains in question due to the emergence of a new variant of the virus. But the two other factors can be much easier to predict since the country has some semblance of control over them. The economy is expected to grow by 5.1 percent in 2021, a modest yet practical forecast for this Asian country.
Property Market During the Pandemic
When the pandemic started, people thought Singapore’s property market would fail. The government’s stimulus program, together with a moratorium on loan repayments, allowed the market to withstand the pandemic’s effects.
The government’s stimulus package and job protection allowed the majority of Singapore residents to keep their jobs. The moratorium also allowed homeowners to stave off defaulting on their loans. With this, they were able to keep their homes. Developers were also granted a reprieve as they were given extensions on their project completion dates. All these factors prevented housing prices from falling too far down.
But the property market paused for a while during the implementation of the Circuit breaker measure. During this period, all non-essential economic activities were stopped, and schools shifted to home-based learning. Social gatherings were prohibited, and dining-in was not allowed. Due to this, showrooms were closed, and property viewings took a pause. This also gave rise to the digitalization of the property market.
Digitalization of the Property Market
Since people couldn’t physically view the properties available, developers started to use technology to connect with their market. They started creating digital marketing collaterals, and real estate agents started to conduct virtual walkthroughs with their clients. The practice allowed potential buyers to check out the interior design of Singapore condos and other residential units online.
Balloting was also conducted virtually. Similarly, the selection of the units was made without the buyers being physically present in the showrooms of the developers. Paperwork was also completed efficiently as sales documentation was digitized.
Even as people visit showrooms physically, digital technology in real estate is still expected to be used. This is particularly true with the continuing implementation of social distancing rules and a limit on the number of people visiting the showroom at any given time.
Home sales might have dropped during the circuit breaker period, but the market is expected to recover. This comes as Singapore started its vaccination program recently. Industry watchers are expecting to see a couple of trends in the property market of the country. One trend is an optimistic outlook as the economy starts to recover. While this optimism didn’t disappear as people continue to buy properties, it’s expected to grow as the end of the pandemic in the island-state draws near.
This optimism in the market can also increase prices as the supply of homes goes down. With residents snapping up available units in the market, the housing supply will go down. And in a low supply and high demand market, prices are expected to go up.
Additionally, new development launches are expected to be lower compared to the pre-pandemic period. Industry watchers expect only 20 new developments available in the first half of 2021, which is relatively lower than the 25 to 30 launches in the first and second half of 2018 and 2019. Despite this, they still have an optimistic outlook on the property market of Singapore.
Singapore’s real estate market experienced a slowdown due to the pandemic, but it is expected to bounce back once everything settles down.