For me, 2020 passed in a blink of an eye.
I guess when we welcomed a newborn baby girl in early Feb 2020 – time can pass very quickly!
I think 2020 will be known as the lockdown year when we stayed at home till we got tired of our own 4 walls.
For some people, they picked up new skills like cooking, baking and exercising from home.
And of course – not forgetting the irritating Home Based Learning. 😅 I am sure many parents can relate here.
With my newborn daughter and my son going to Primary 1 – these two events actually changed my lifestyle a lot as they took up a lot of my time and energy too.
Many adjustments to be made.
I can understand why my clients’ need their homes to be very close to their childrens’ schools.
Here are my 7 lessons of 2020 and how it relates to the Singapore property market.
Do take note this is based on my personal experience of meeting 130+ families in 2020 alone.
Lesson #1: Consumable Property Becomes More Relevant
Zooming became a verb and a regular routine in our lives.
I also started having more online discussions or meetings regularly through Zoom instead of meeting my various clients and prospects around Singapore.
It is interesting that this article I wrote on consumable property became even more relevant.
Thanks to the pandemic – the idea of a consumable property became even more popular due to the compulsory Work From Home (WFH) process and Home-Based Learning (HBL).
Everyone appreciated having their own space more than ever.
The bigger the better it seems.
Lesson #2: The City Centre Lost Its Lustre In 2020
It seems that being close to the city centre is not as important this past year.
Location is still important but people are willing to look outside and further away from the CBD area.
Right now, buyers are really looking based on their own individual needs and wants and are no longer concerned whether is it nearby Raffles Place or Orchard.
From my experience, it seems units located nearer to Woodlands Causeway Point seems to have a higher demand than a unit at Tanjong Pagar.
Below is the transaction volume of a condo located at Tanjong Pagar. Compare the 2019 transactions vs 2020 transactions.
Lesson #3: The More “Consumable” the Property, The Higher The Profits
With various government policies in place to cool down the market from speculation and investment – there is only ONE group of people that the government cannot stop.
They are the consumers.
COVID-19 has forced people to remain home and avoid large crowds.
This idea of being stuck at home has made more people to start looking around to expand their current place.
So it becomes this – the more “consumable” your property, the better the value it gets.
This is always about supply and demand issue.
Below is an example I used of a slightly older condo in Hougang that people mainly buy for consumption.
I sorted by most profitable transactions.
You can see that most of these profitable transactions are those who:
- bought during the launch at 2010
- were the bigger units
- sold in 2020
I decided to confirm this by checking the smaller sized units:
I did another sorting by size and you can see the smaller sized unit bought during the 2010 launch are not making as much profits as the bigger units.
Take note – consumption is a big word here because it depends on who is the consumer.
So it not a 1 size fits all solution that says a big unit will be suitable for consumption.
This is because if you buy a big unit at the Sail at Marina Bay – that will not be a consumption property.
A large unit at Marina Bay is more likely to be a sublet investment property.
To find out what is a consumable property – you need to understand who the consumers are first.
This is not so easy to explain here.
Lesson #4: There Are Many People Who Can Easily Afford A Property But Has Not Purchased. (That Is Until 2020)
Due to COVID-, the borders are closed.
Many Singapore PRs who works in Singapore and travel in between the borders everyday now has to choose ONE place to settle down.
And most of the time – they chose to stay put in Singapore due to work commitments.
With that decision – they start to find a place to settle down.
There were also people who were stuck in a room rental due to the circuit breaker. These people also started to realize that they should settle down into a proper full-sized flat after being confined in a single room for 2 months.
At the same time also, there are people who didn’t want to wait for BTO as the launches are delayed and the construction time is taking longer as well.
So all this various behaviours from Singapore PRs and those who are not willing to wait – has caused the HDB resale price to rise up by a lot.
And demand for it is still growing.
I finally start seeing HDB prices starting to recover. But will it stay there for long or will it come down again after that?
That will be the big question mark ❓
I believe it will it not come down so fast.
The prices should stay there up there for awhile more. Why?
This demand I am seeing is very real.
Unless all these PRs return back to Malaysia after the border opens again, then demand might drop. But I doubt that is the case.
The demand for Singapore property is still very real if you look at the amount of people leaving Singapore at night and returning in the day back when borders was still open.
So resale units are definitely moving now.
Please don’t say resale market is always going to lose money as that is not always the case.
Lesson #5: Singapore Is Capable of Handling A Work From Home (WFH) Workforce
Having everyone at home streaming Netflix, watching YouTube, gaming, having zoom meetings and all other sorts of internet usage at the same time – means our Internet connectivity has to be very stable.
Our system can still take it.
It also means our fundamentals on this part is still very strong. With everyone staying at home and using the Internet – it is amazing that that our ISPs are still up!
If you compare this to many other countries – perhaps Malaysia – they might not be able to support this increased usage.
So what does this tell the world?
If you want to set up office and you are a huge tech company – where will you go?
If you want to have a workforce but don’t want the office overheads to be too high – where will you go to?
If all this happens – will our citizens’ wages become higher as our fundamentals are present to support our citizens?
The attractiveness factor of Singapore goes up as bosses worldwide look for a stable place with great infrastructure and internet connectivity to setup a company.
Even Tesla has revealed plans to setup a Singapore office here.
Lesson #6: New Launch Units Are Becoming More Limited
By 2021, there will not be much new launches coming up.
This means:
- the government has to start selling more land again
- enbloc will start to see some new momentum
- or the government might act to add in more cooling measures in 2021
Moving forward – I think the interesting new launches will be at:
- Rose Residences near Pasir Ris MRT
- One North Eden
- One Bernam
- 1 plot of land at Bartley area
- 1 plot of land at Irwell Bank Road
- 2 plots of land at Canberra Drive.
Is this a lot?
I must say it not really a lot especially if you compared it to the last few years.
And from the numbers you can see the supply of unsold units is coming down steadily.
If you look back at the chart above – prices started to increase from 2017 when there was lesser unsold units.
You can see what happened in the following new launches:
- Penrose take up rates for new launch is now getting higher when compared to its launch day
- The Linq was fully sold within 1 week (90+ % sold on Day 1)
- Clavon sold 72% on Day 1 of its launch
- Normanton Park being the most recent – sold more than 30% on Day 1
30% might seem very low. But 632 units in 1 day is similar volume to the fully sold up Clavon that consists of 640 units.
(Take note all these recent launches happened after the restrictions on OTP issuances.)
Not sure what all this sales numbers mean? I will give you some reference.
Florence residences only sold 54 units in Day 1 of its launch out of 1410 units back in March 2019.
So all this take up rates and high sales volumes are giving developers a lot of confidence.
Humans are like that – so when people buy, what do you do? You follow…
What can we do with a market like this?
There is still a strategy you can apply to protect yourself. But I must say this might only be the beginning.
If you see back in 2009 when Caspian at Lakeside MRT and Double Bay at Simei MRT was having good sales – the response was only the beginning.
This was followed by:
- 8 @ Woodleigh at Woodleigh MRT
- Optima at Tanah Merah MRT
- Trevista at Toa Payoh
From that point on – people started to notice units were moving already. And the whole growth sparked off the multiple rounds of cooling measures in 2013.
So if you notice the patterns – it is very similar.
2008 financial crisis. Then followed by quantitative easing (QE).
Then the stock market rebounded and property prices moved up.
Below the private property price index.
Source: https://data.gov.sg/dataset/private-residential-property-price-index-by-type-of-property
The news says that even “more help” was done in 2020 than back in 2008.
I might be wrong but I am looking from it at the human behavior point of view. There are many similar traits.
Now, if you have been planning to enter the property market – I suggest you do it soon.
Cooling measures might bring down the prices. But it can also make it more difficult to buy something.
It was interesting to note that after restricting the OTP re-issuance in Sept 2020 – the market moved even more with greater volume of sales.
Imagine all this sales figures we see today are actually buyers who are ready to buy immediately.
Even with TDSR, ABSD and other cooling measures – alot of people are making the decision to proceed forward and make their purchase.
In the middle of the pandemic.
It tells me the market is understanding that supply is dwindling and demand has gone up.
Lesson #7: When My Clients Are Happy, I Am Happy!
My readers here are a great source of happiness.
Those who decide to engage me are treating me very well.
I received chocolates, ice cream, wine, toys for my son, egg tarts, soft drinks, soft drinks and soft drinks.
Bird’s nest also.
You name it and I think I have received it…
All this tells me that my readers and followers are growing…
The trust we built over the years, the happiness I see from the results I get for them, and most importantly the friendship built over the years.
When I visit some places, I am reminded of my readers and the stories they shared about that particular place. So my memories are all over Singapore.
I really appreciate all the interaction, engagement and support. It has made me become better and better everyday.
The record high price achieved… the improvements I do, from simple painting and packing, to change cabinet doors, to hack away the whole cabinet.
All kinds of suggestions to cater to your family needs just to make sure you get the best possible price.
All this can never happen without all your support.
And not forgetting the referrals… the shares and likes from all my readers who checked out my content.
Then, there are also the silent readers who always tell others to read up on me and engage me.
I don’t know who you are but I know we are connected in certain ways.
I want to take this opportunity to thank you as well.
Thank you for all your support.
I will continue my mission to help bridge up the information gap between the markets and the consumers – especially on those topics that most people will NOT be talking about.
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