Singapore home prices set for first decline since 2016 as economic recession bites, Colliers says
- Home prices could fall by 1 to 3 per cent, unit sales seen hitting lowest since 2016: Colliers
- Singapore unveils S$48 billion stimulus package to counter slowdown as government sees economic contraction in 2020
Singapore’s home prices are poised to fall for the first time in four years as the global coronavirus pandemic is likely to push the city state’s economy into a recession, according to Colliers International.
Prices could decline by as much as 3 per cent this year, the property consultancy said, based on an index of new and existing properties tracked by Urban Redevelopment Authority (URA). The expected drop is the first setback since 2016, though not the steepest in the past decade, it said.
Singapore last week unveiled a S$48 billion (US$33.7 billion) stimulus package to counter the slowdown triggered by the pandemic, with the government downgrading its economic forecasts to a contraction of between 1 and 4 per cent for 2020. The economy shrank 10.6 per cent in the first quarter, the worst in a decade.
“With the downward revision of GDP (gross domestic product) growth in 2020, we now expect property prices to decline by one to three per cent,” said Tricia Song, head of research for Singapore at Colliers. “We are likely to go into a recession.”
Singapore’s open economy has not escaped the impact of a pandemic in which industries such as aviation and tourism have been slammed by travel restrictions. Many of the city’s businesses that rely on China for growth are hardest hit as supply chains were disrupted and manufacturing slumped amid lockdowns.
Singapore’s private residential market was worth about S$35 billion in 2019, based on more than 19,000 units sold, including land and non-landed homes and so-called executive condominiums. About 41 per cent came from primary sales and the rest from secondary market transactions.