How does a pandemic like COVID-19 affect property sales in Singapore?

Joe Tng, ERA Executive Group Division Director:

There will be a knee-jerk reaction initially. The majority of buyers will likely wait to see how COVID-19 pans out locally and globally. However, properties – resale or newly launched – will still attract buyers if priced correctly and at a good location as the market is still flushed with cash liquidity. Asians are still very much into purchasing property, be it for upgrading or legacy purposes, and partly because of the fact that it is something that can be seen and used.


How has COVID-19 affected new launches?

We hear some investors build up their reserves during the good years and pick up bargains during crises.

Ismail Gafoor, CEO of PropNex Realty:

To a certain extent, the virus has had an effect. We are starting to see a slowdown, especially when it comes to buyers from Mainland China. This is partly due to the travelling restrictions that have been imposed. On the flipside, Singaporeans are continuing to enter the property market. This is mainly because developers are sensitive to the pricing of projects.

Despite the virus, two recent project launches demonstrated strong indicators of interest. Parc Canberra sold 64 per cent of its units during the launch weekend, while The M drew 2,000 visitors. Pricing is key under current circumstances as both developers and buyers have come to a realisation that such crises offer opportunities to enter the market.

Most developers are taking the necessary measures and precautions. They are screening visitors and getting them to fill in health declaration forms. Additionally, some booking processes are confined to a smaller group of people. This provides confidence to investors, consumers and the salespeople.


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David Ng, Senior Associate Marketing Director at Propnex Realty:

The launch of The M was a huge success in the face of uncertainty. Developer Wing Tai acted wisely by employing multiple layers of hygiene controls. It monitored temperatures, used air cleaners, limited the number of people in the showflat at any one time and regularly did professional cleaning.

At an average of $2,450 psf, it was considered under-priced, especially when compared with the nearby new launch of Midtown Bay, which averaged $2,900 psf. This gave buyers confidence that the risk of entry was low.

The M has much in its favour. It’s in a central location, is close to MRT lines and is within the shopping belt. But the most exciting are the expected developments coming into the Ophir-Rochor corridor, like the Bugis Street redevelopment and the upcoming North-South Corridor.

The next major launch is The Landmark at Chin Swee Road. It’s a 39-storey development on a hill with 360-degree views of the city. If developers adopt the same cautious approach with robust hygiene controls and sensitive pricing, then I expect buyers’ response to be as positive as The M’s.


What was the buying behaviour of investors like during other crises such as SARS and the Asian financial crisis?

Joe Tng:

During the SARS period, sales volume dropped for six months but resumed to normal afterwards. Investors aimed for bargains buys. Unless there was a genuine need to buy for personal use or they considered the prices to be very attractive, most held back on buying or tried to anticipate the “lowest” entry point.


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So, is now a good time to buy properties in general?

David Ng:

Yes. We’re living in an extended period of low interest rates to leverage on, and the COVID-19 uncertainty has developers launching at very attractive prices. And all this is in the backdrop of the massive rejuvenation in key centres of Singapore, especially in the Core Central Region.

We have a lot of property price data from the SARS and H5N1 influenza period that shows many buyers holding out during times of uncertainty. But those brave enough to buy were able to pick up bargains.

Singapore’s foundation is very stable with significant savings, strong financial regulations, and a vision of its future in The Masterplan that has been proven to pan out. The authorities have many levers to control the property market such as the Additional Buyers Stamp Duty, Sellers Stamp Duty and Loan-to-Value limit.

Low Po Yu, Senior Marketing Director at ERA Realty Network:

Property is closely linked to the stock market, which has dipped significantly. Landlords have dropped commercial rent and businesses are impacted. Most buyers’ focus is on keeping safe and healthy, and not on viewings right now. This also means that if you have researched well and already know what you want, you have lesser competition.


Finally, given the current uncertainty, what are your tips for property investors?

Joe Tng:

Investors should just go ahead to buy a property if it is of good value and offers good returns. From the buying patterns I observed during the SARS and financial crises, investors pulled back on purchases but those who bought still made a fair amount of money in the long term.

Low Po Yu:

Look for good value. I would recommend looking for undervalued strategic locations that have robust potential, like those that are in line with government plans and will welcome new MRT lines.

Ismail Gafoor:

Investors who bought during previous crises have benefited in terms of capital appreciation for the mid- and long-term. There is a window of opportunity available for people who are savvy in planning ahead.


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