The COVID-19 pandemic has been hard on many industries worldwide. Singapore has also faced similar issues regarding the financial stability of the local economy. Property investing in property during covid-19 in Singapore has long been an attraction for both local and foreign investors. Singapore’s prime real estate market has proved to be rather lucrative over the years. Many businessmen want to buy property in Singapore, so much so that home prices have risen to the point where the government has to step in.
In that case, cooling measures have been put in place to stabilize property prices and ensure they are affordable for locals to live in. Therefore, has Covid-19 changed the way investors see the property market in Singapore?
Initially, it was quite an abrupt reaction. Many buyers are waiting to see how COVID-19 will affect local and international markets. However, whether it is a resale or a newly launched property, it will still attract investors if priced correctly. A good location is another factor that affects whether or not individuals will buy property in Singapore.
The continued interest in property investment stems from the market’s strong liquidity. Asians love to invest in property, especially in Singapore. It could be to upgrade, earn, or keep for legacy purposes. In this article, we will discuss how property investment has been affected by the COVID-19 pandemic.
How did investing in Property During COVID-19 affect the Market?
Viewing
Viewings are now conducted over video conferencing via applications such as Zoom or Skype. When foreigners or locals want to buy property in Singapore, the viewing is probably the most crucial part of the process. However, due to social distancing measures and remote work, most agents are using technology to conduct virtual viewings and tours. This may not be as convincing as an in-real-life showroom presentation. However, successful investments have been made through virtual viewings.
Property investors seem to get hooked on a home, and it helps them make faster decisions. Once safe distancing measures have cooled down, they can inspect the property in person.
Valuations
It is no surprise that valuations are more difficult to retrieve now more than ever. This can be a challenge when investors are considering buying property in Singapore. The reason is that all resale properties require a proper valuation report to secure loans. This is specifically essential for older properties that need new valuation reports, as most of their existing valuations are outdated. Banks will not be able to work out how much they can lend you without the valuation of an older property.
However, on the more positive side, valuation reports are not necessarily required to buy property in Singapore if it is for a new condo development (including BTO flats from HDB). In cases like these, banks will accept the developer’s price as fair value.
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Construction
Due to the circuit measures put in place earlier this year, all construction activities have been significantly delayed. Many projects are also facing supply shocks. This is due to the closed borders. Certain materials are required from Johor Bahru; however, they will not be able to come through during lockdowns. There has also been a shortage of Labour. Many construction workers were not allowed back into Singapore if they had been in China during the COVID-19 outbreak.
Singapore’s Covid-19 infections had risen dramatically due to cases of foreign workers staying in dormitories. This will surely impact supply once construction projects resume. However, even if these factors dampen and restrict the progress of property developments, they have not pulled down the property market in Singapore. Construction delays should not affect your decision when buying a property in Singapore.
The government’s Help
The Singapore government has rolled out 3 types of contingency measures to help the property market weather the pandemic. These plans include the Singapore budget, the developer’s action, and the ABSD tax. The Singapore budget has helped with factors such as deferred repayments on property loans, borrowers refinancing without TDSR, property tax rebates for non-residential properties, extended disposal timelines, and rental costs. Developers will be cutting back prices by almost half for upcoming properties.
Therefore, it is more likely that developers will lower the prices of newly launched properties. This is what will attract more foreigners to buy property in Singapore. As for the ABSD tax, it has been seen fit to ease the 5-year ABSD timeline for building and selling projects.
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Conclusion
If you plan to buy property in Singapore during the pandemic, it’s a good idea to do your research first. Look out for affordable housing at good locations. That is what is mostly highly appreciated in Singapore’s property market. Want to know more about property market trends and investing? Read all about it on our blog at SRX Property.
