The public real estate market in Singapore is showing signs of steady recovery as prices are projected to continue rising in 2021. With the roll-out of the Covid-19 vaccine, proximity to important growth markets, government initiatives, and established regulations are just some of the driving factors of the current positive market sentiment.
But before we map the road ahead for the property market in 2021, let’s look back at some notable highs of 2020.
Overview of the property market in 2020
At the peak of the pandemic, Singapore’s property market went through a rollercoaster: HDB flat resale volume plunged by 41.9% in Q2 2020, during the two-month Circuit Breaker period in April and May. Compared to the same period in 2019, resale transactions were 45.4% lower.
However, the market saw an impressive turnaround in Q3, right after Circuit Breaker, when the government eased safe-distancing restrictions; home-buying activities picked up across various market segments.
Prices for new HDB flats are expected to stabilise; resale prices to increase.
Some highs in the property market last year worth noting include the following:
- According to HDB‘s flash estimates, HDB flat prices rose a third consecutive quarter by 2.9% in the fourth quarter of 2020, the highest quarterly increase in about ten years.
- More than 80 HDB flats were sold for over a million dollars, eclipsing 2018’s record of 71 homes sold.
What’s next for 2021
Industry experts assert that the property sector has continuously displayed resilience over the last decade, posting record-high levels in take-up, supply, prices, and land values despite the pandemic and resulting economic downturn.
The following forecast of the property market in 2021 assumes a progressive roll-out of the Covid-19 vaccine amid the Phase 3 reopening regulations and the continued easing of social distancing measures.
Public residential real estate market
In the public residential real estate market, you can anticipate:
- HDB upgraders driving the public housing market
- Demand to remain consistent
- Prices for new HDB flats to stabilise and resale prices to increase
- Transaction volume to remain strong
1. HDB upgraders driving the public housing market
Some 50,000 new HDB flats would have reached the five-year Minimum Occupancy Period (MOP) and become eligible to enter the resale market by the end of 2021. As such, demand is expected to be consistent, driven mainly by new homeowners looking for a bigger home.
Some of the recently MOP-ed HDB flats-in 2020 and 2021-will be coming from Sengkang (6,618), Choa Chu Kang (6,250), and Punggol (5,206). Trivelis and Clementi Ridges, both located in Clementi, will also be reaching its MOP this year.
2. Demand to remain consistent
With new homeowners entering the market, demand for public housing may also remain consistent in 2021. They may opt for bigger resale flats, like the million-dollar HDB flats located in prime areas such as Bukit Merah, Queenstown, and Clementi.
3. Prices for new HDB flats to stabilise and resale prices to increase
Having a consistent supply of new HDB flats means that prices may stabilise, particularly in mature estates like Geylang, Kallang/Whampoa, and Queenstown.
However, HDB resale flat prices may continue to climb as the healthy demand in the market remains healthy, as observed by the increasing number of HDB transactions in the past six years:
- 2015: 17,780
- 2016: 19,373
- 2017: 20,351
- 2018: 21,569
- 2019: 21,924
- 2020: 22,727
4. Transaction volume to remain strong
Speaking of which, transaction volume is expected to remain strong this year, as the supply of new flats matches a healthy demand from prudent buyers who may favour HDB flats to condos.
Apart from these public and private housing predictions, there are other trends we might see regardless of property type.
Larger homes with flexible spaces or more rooms to be a popular choice
The pandemic has shifted homebuyers’ needs when shopping for property, in that their mental wellness will be at the forefront of their decision-making process.
A majority of the country adapted to remote working since the Circuit Breaker period last year, revealing a dire need for homes with flexible spaces that can accommodate the New Normal: to work, play, and rest in the safety of their homes.
Larger homes in the suburban districts that are more value-for-money may also be the favourable option.
Homebuyers may also be on the lookout for homes with more rooms, as more people living with extended family or parents are seeking out their own homes. After experiencing the stress and tension of being confined in a home where the whole family stays, many may be more inclined to move out.
Larger homes in the suburban districts that are more value-for-money may also be the favourable option, instead of properties with convenient access to business districts. Therefore, properties in the Rest of Central Region (RCR) and Outside of Central Region (OCR) may move the fastest.
Virtual home tours to increase
Technology is here to stay, whether those in the real estate industry like it or not. And with the continued innovation of technology, demand for real estate virtual home tours may continue to increase, especially with travel restrictions still in place. Virtual tours are the next best option for physical viewings, not just for Singaporeans, but also for property investors overseas.
There is no doubt that technology will continue to hold an influential role in the real estate industry, with more millennials starting to buy, sell, and rent homes in these next few years. As digital natives, they are more receptive to digitally-enhanced products, services, or experiences, including virtual home tours. They will also prefer conducting property transactions online, using mobile applications or web portals, because it is faster, simpler, and more convenient for them.
Thus, real estate developers, salespersons, and service providers will be more incentivised to shift from offline to online, in a bid to streamline property transactions. This is where Ohmyhome comes in.
Property investing for a better future
“Many customers are leaning towards facts and data more than just pure sales talk,” Ohmyhome cofounders Race and Rhonda Wong said. “The home research report produced by our data team helps them make informed decisions as information such as past transactions, current asking price, valuation, and other data are presented to them in an easy-to-understand report.”
Ohmyhome founders, Race and Rhonda Wong, think it’s time for Singaporeans to start purchasing their dream properties.
The two real estate entrepreneur sisters encourage Singaporeans to invest in properties this 2021 as they remain confident in the property market-even in the coming years.
According to Race and Rhonda, it is high time that Singaporeans make their dreams of purchasing their properties come to life, and Ohmyhome resolves to help them fulfil their aspirations. “Singapore is going to be a very important country for international firms setting up shop here. Having the chance to own a property here is a dream for most, but it is already a reality for Singaporeans because of the HDB. We strongly encourage you to own a home soon.”
However, Race and Rhonda are aware that there is a shortage of information regarding available properties and financing options. Some real estate professionals fall short in providing what customers need. “These obstacles to eventual property investment and homeownership are what Ohmyhome aims to address,” they affirm.