Prime landed home sales also declined 23.1% to S$1b.
Property consultancy firm Knight Frank notes that demand for prime landed and non-landed homes were hit by the economic uncertainties brought about by the COVID-19 outbreak, but sales are expected to rebound in the second half of 2020 as restrictions ease and Singapore slowly reopens its economy.
Here’s more from Knight Frank:
The sale of prime non-landed residential units in H1 2020 amounted to S$659.2 million, representing a 52.9% half- yearly drop from the S$1.4 billion in H2 2019. The decline in sales was mainly due to the implementation of restrictive measures locally and across the globe, in addition to the closure of national borders restricting travel. This impeded the inflow of potential foreign buyers interested in the local luxury residential market.
The average unit price of prime non- landed residential units in the first half of the year was S$2,412 psf, a slight decrease of 2.7% from S$2,479 psf in H2 2019. There were 85 units transacted in H1 2020 compared to 155 units sold in the second half of 2019.
While sentiment across the entire residential market generally weakened amid the COVID-19 outbreak, there were significant deals in the prime segment. This included the sale of a penthouse unit at Ardmore Park for S$27.7 million as well as a unit on the 25th floor of The Claymore for S$17.0 million in April after the start of the circuit breaker on 7 April 2020.
As regulations ease with Singapore reopening its economy in phases, the sale of prime non-landed residential units are expected to improve in the second half of 2020, even though travel bans across the globe remain largely in place. Despite the persistent looming pall of the COVID-19 pandemic, foreign buyers continue to regard Singapore as a safe haven for investments, typically in the form of residential homes.
Based on URA real estate statistics, the Property Price Index (PPI) of landed private residential properties was 170.3 in Q2 2020, unchanged from the previous quarter, bringing the total decrease in the first six months of the year to 0.9%.
The pandemic resulted in potential buyers delaying their purchase plans as the economic outlook was clouded with a heightened number of new cases across many nations. In H1 2020, a total of 106 landed homes totalling S$1.0 billion exchanged hands, shrinking by 23.1% from the S$1.3 billion transacted in H2 2019, constituting 125 units. Despite the reduced sales volume, there were notable deals at Sentosa, with detached homes located on Pearl Island and Cove Grove sold for S$25.0 million in May and S$24.0 million in February respectively.
During the same period, there were also six GCB transactions amounting to S$166.4 million in H1 2020, 45.8% lower than the S$306.9 million recorded in H2 2019.
Despite the pandemic dampening overall sales activity in the residential market, there was continued interest in the GCB market, due to the exclusive nature and limited supply of these bungalows. Notwithstanding the physical restrictions imposed during the circuit breaker from 7 April to 1 June, major deals were recorded in the months of April and June, with the sale of bungalows at 53 Windsor Road (S$21.7 million) and 76 Windsor Park Road (S$21.3 million).
As physical restrictions are relaxed (from 19 June), Knight Frank envisages trading activity and demand for landed homes to pick up in the second half of 2020. Landed homes in landscarce Singapore make up about a mere 5% of all housing stock. With limited new upcoming supply and prices easing for these residences, potential buyers with cash reserves will likely scout for good- value opportunities in the rest of 2020.
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