Coronavirus jeopardizes property investment in Singapore as sales dropped 37% in the Q1 of 2020 according to Cushman & Wakefield.
Christine Li, the head of research at Cushman & Wakefield for Singapore and South-east Asia, said on Monday that big-ticket commercial transactions were absent. She added that this was a direct impact of the pandemic.
During the first-quarter of 2020, sales of commercial properties were down 81% from the first quarter. Meanwhile, properties categorized in hospitality sectors, such as hotels, apartments, and co-living spaces, were also experiencing similar downfalls as travel bans take effect.
Regarding the situation, both buyers and sellers are having strong sentiments about the business. Sellers refuse to lower the price in hope that the situation will only be temporary. Buyers are waiting for a possible recession before making a purchase.
“Sellers were unwilling to lower prices significantly, hoping that the impact on the economy would be temporary and that market confidence would recover rapidly after the pandemic was contained,” she explained.
“Meanwhile, buyers were waiting on the sidelines to enter at more attractive prices as it is appearing increasingly likely that the reduction in economic activity from lockdowns will trigger a global recession.”
Also Read: New Cases COVID-19 Rose in Singapore
Property Investment Sales Worsen as Singapore Applies “Circuit Breaker”
Circuit Breaker, Singaporean social distancing and lockdown, has caused lower performance of real estate firms. The firms estimate that the condition will not differ much until Q2.
The expectation is rational, considering the Circuit Breaker that limits non-essential business activities from April 7 to May 4. However, there is also no certainty to whether an extension exists or not.
If, by any chance, the coronavirus outbreak does not get weaker, there is a possibility that there will be an unknown period of extension of the breaker. If that happens, the property investment sales might not have much change till the end of the quarter.
That said, the report also mentions a positive outcome that might possibly happen in 2021. Accordingly, the decline in interest rates could lead to a swift ROI once the sentiments are gone.
Also Read: WHO: Coronavirus Pandemic ‘Far from Over’ in Asia
