Huttons' comments on URA and HDB 1Q 2020's flash estimates
It is not totally unexpected that softness starts to appear in the property market similar to countries in the region like China and Hong Kong.
However it should be noted that this decline is led by non-landed homes in the mass market and landed segment where prices reversed its upwards trajectory to trend downwards. Prices of non-landed homes in the Core Central Region and Rest of Central Region narrowed their declines in possibly a sign of stabilisation of prices in these two regions.
As economic and employment conditions were not dire in 1Q 2020, sellers of completed homes in the mass market and landed segment most likely opt to accept lower profits in a bid to offload their property, pushing the price index down.
The economy is not going to be rosy in 2020 but the budget and measures taken by the Government will help to cushion the impact. Latest measures by the Monetary Authority of Singapore to allow individuals to defer payment of property loans will support the property market.
The HDB resale market may not be spared from Covid-19 even though HDB flats are meant for owner occupation. There will be buyers who will put their plans on hold or adjust their budget lower as their earnings take a hit. The HDB resale index might go southwards in 2020, dashing any hope of an upcycle.