How The Phase 2 Covid Restrictions Could Affect The Residential Property Market

Singapore, 17 May 2021 – Real estate developers launched 1,038 private housing units, excluding Executive Condominium (EC), in April 2021, 8.2% more than the preceding month. Four new residential projects were launched in April, three of the projects were located in the prime Core Central Region (CCR), as there are more projects in the CCR and city fringe areas than in the suburban areas lined up for launch this year.

Residential projects launched in April 2021

Project Name Location Locality Tenure Total no. of units in project Median transacted price in Apr-21 ($psf)
Irwell Hill Residences Irwell Hill CCR 99-year leasehold 540 $2,628
One-North Eden Slim Barracks Rise RCR 99-year leasehold 165 $2,009
Grange 1866 Grange Road CCR Freehold 60 $2,718
Peak Residence Thomson Road CCR Freehold 90 $2,576

Source: URA, ERA Research & Consultancy

In April, developers sold 1,262 private housing units (excluding EC), 2.6% fewer than the 1,296 units sold in March 2021. In the current pandemic period, any sales above 1,000 units in a given month can be considered a good market performance.

No new EC project was launched, but developers sold 80 new EC units in April, about the same sales volume as the preceding month

Effects of Phase 2 Covid restrictions

Last week, the Singapore government announced the restrictions to contain the spread of the coronavirus will be tightened for four weeks. Phase 2 (Heighten Alert) will start from 16 May to 13 June 2021.

The Singapore residential property market had a stellar performance in terms of sales and price growth after the lifting of the Circuit Breaker last year. The effects of any tightening of the social distancing restrictions on the transactions in the property market will depends on three factors:

1. Severity of the restrictions
2. Duration of the restrictions
3. Availability of substitutes

Firstly, Phase 2 (Heighten Alert) is not as severe as the Circuit Breaker. The residential project show flats will still be open. In the resale market, buyers can still visit to view completed properties offered for sale.

Secondly, the duration of Phase 2 (Heighten Alert) is four weeks, shorter than the 8-week Circuit Breaker.

Thirdly, after the experience of the Circuit Breaker last year, many developers and their agents have in place the necessary IT platforms to market the residential units remotely, such as through virtual show flats. Therefore, there are substitutes to physical show flats.

Anecdotally, the private housing sales in the first two weeks of May was at about the same pace as in April. The sale volume could dip marginally during the Phase 2 (Heighten Alert), especially if developers were to avoid launching their residential projects during the 4-week Phase 2. However, the pent-up demand built up during the 4 weeks could spur more transactions after Phase 2 is lifted.

Hence, by all measures, the Phase 2 (Heighten Alert) could slightly dent the transaction volume during the 4-week period. However, the property market will likely return to business as usual once the restrictions are lifted.


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