News: Private residential transactions continued to push on during circuit breaker

May 14, 2020

There were 286 caveats lodged from 7 April to 30 April, according to Knight Frank Singapore. 

Despite the closure of showflats and restrictions of viewing of properties because of the circuit breaker measures, Singapore’s real estate market still showed life.

“A quick count of real estate caveats across all sectors from 7 April to 30 April showed properties being transacted, with the private residential sector leading in volume with 286 caveats,” said Leonard Tay, Head of Research at Knight Frank Singapore.

Related: The URA Caveat: Why It’s So Irresistibly Good

For the whole month of April, the private residential market registered a total of 581 caveats.

Tay revealed that 97 of the 286 units transacted during the circuit breaker period were recorded in the primary market, while the other 189 were posted in the secondary market.

“Naturally, there might be technical reasons as to why there are private residential transactions in a time of Covid-19, such as, these caveats after 7 April include those that were close to sealing the deal prior to the circuit breaker,” he said.

“But these numbers as meagre as they may seem, show that it is possible to sell and purchase private homes, in spite of the restrictions.”

Sales volume for the commercial sector, on the other hand, were much less, with only five office caveats and eight shophouse caveats posted in the 24 days of the circuit breaker in April. The industrial sector saw only eight factory units being transacted during the same period.

Knight Frank explained that the continued residential activity points “to property being the asset class of choice among Ultra High Net Worth Individuals (UHNWIs) for wealth preservation”.

Based on the Attitudes Survey of The Wealth Report 2020 showed that Singapore is the third most popular destination for purchasing homes amongst Asian investors, behind the US and UK.

Investment property is still the most popular asset class among Singaporean UHNWIs, with around 40% planning to increase their allocations to real estate. Real estate investments account for 40% of the current allocations of UHNWIs.

“Real estate may be down, but it’s definitely not out,” said Linda Chern, Head, Project Marketing, Prime Sales & Leasing, Residential, Knight Frank Singapore.

“A slower market can give buyers more time to make better, considered options before they make a decision on a property purchase. This could be why homebuyers are still actively seeking and buying properties, be it for investment or simply to have a new home to stay in. Real estate is a necessity that holds perennial value regardless of the economic situation.”

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg

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