Singapore home sales slumped in March and are set to take a harder hit in coming months as the government enforces a more draconian lockdown that threatens to bring the property market to a standstill.
Sales in the city-state fell 32% to 660 units last month — even before the toughest curbs were imposed — from 976 in February, according to Urban Redevelopment Authority data released on Wednesday.
Initially praised for containing the virus, Singapore is now
facing a surge in local infections. To prevent wider community transmission, it has shut schools and most workplaces. Show flats have been closed and viewings postponed, while fear of getting sick has prompted potential buyers to stay home.
“This lock down is a disruption to the velocity of transactions in almost all sectors of the economy and real estate is no different,” said Alan Cheong, executive director of research at Savills Plc.
With the lockdown in place, developers are likely to postpone launching new projects. And while some are offering “virtual” tours, prospective buyers may not yet be ready to purchase properties online or be “in the right mood” given the gloomy economic outlook, said Clarence Foo, a Singapore-based realtor at APAC Realty unit ERA.
“I expect sales volume to be low in April,” he added.
The turn in Singapore’s fortunes has happened quickly. In the early stages of the coronavirus outbreak, the property market held up better than the rest of Asia, with sales defying expectations while prices posted modest growth.
That’s no longer the case. Home prices fell the most in more than three years in the first quarter as the virus slammed the economy.
Meanwhile, travel bans have led to a decline in foreign buyers. Just 25 units were sold to overseas buyers in March — half the monthly average of the past year, according to real estate agency OrangeTee & Tie Pte.
Luxury home sales plummeted 89% to 45 units last month from 412 in February in the absence of rich buyers from China who have propped up the top end of the market.
“A temporary pullback in property sales could be expected next month as show flats are now closed and house viewings postponed,” said Christine Sun, head of research at OrangeTee.