Prices of private homes in Singapore rose for a third consecutive quarter, defying the Covid-19 pandemic and a recession.

The overall price index for private residential properties climbed 2.1 per cent in the fourth quarter of 2020, faster than the 0.8 per cent increase in the third quarter, according to flash estimates from the Urban Redevelopment Authority (URA) on Monday (Jan 4).

This is the steepest quarterly increase since the second quarter of 2018 when private home prices rose by 3.4 per cent before property cooling measures hit in July that year.

For the whole of 2020, however, private home prices increased by 2.2 per cent, less than the 2.7 per cent gain in 2019.

The price increase in the fourth quarter was driven mainly by the prices of private homes in the rest of central region (RCR) and core central region (CCR), which rose quarter-on-quarter by 4.8 per cent and 3.3 per cent respectively.

Prices in the outside central region (OCR) rose 1.7 per cent, same as the previous quarter.

For the whole of 2020, prices in RCR and OCR increased the most by 5.1 per cent and 3.1 per cent respectively, while prices in CCR decreased by 0.2 per cent.

Some new projects launched in the fourth quarter of 2020 could have driven prices up, said Ms Christine Sun, head of research and consultancy at OrangeTee & Tie.

In the RCR, the median price of new units at The Landmark near Outram Park MRT was $2,137 per square foot (psf) while The Linq @ Beauty World in Upper Bukit Timah saw $2,171 psf, above the $1,813 psf median price for all new condo units in the region in 2020.

In the OCR, the median price of new units at Clavon in Clementi was $1,637 psf, Ki Residences at Brookvale was $1,766 psf and Midwood in Hillview was $1,624 psf.

All these projects were similarly transacted above the $1,547 psf median price for all new condo units in the region in 2020.

Ms Sun noted that prices have also increased at many newly launched condo projects.

For instance, in CCR, the median price of Fourth Avenue Residences in Bukit Timah rose from $2,258 psf in the third quarter of 2020 to $2,296 psf in the fourth quarter of 2020. Prices at Kopar at Newton have also increased from $2,384 psf to $2,433 psf over the same period.

Similar price increases were observed at other projects such as Treasure at Tampines, Jadescape and Forett at Bukit Timah, Ms Sun added.

Ms Sun expects overall private home prices to rise by 1 to 4 per cent this year, while projects launched by developers could see faster price rises of 2 to 5 per cent.

"Buyer sentiment may pick up further on the growing vaccine optimism and Phase 3 reopening. A number of blockbuster launches could be released in the luxury and city fringe areas which may uplift the overall price index," she said.

She noted that there has been "renewed interest" in resale private homes over the past few months and expects resale prices to increase around 1 to 4 per cent for 2021.

Huttons Asia head of research Lee Sze Teck said up to 20 new launches can be expected in the first quarter of this year, with some 9,000 new units and a price increase up to 3 per cent this year.

“Selling prices are expected to edge up because of recent firm land tender prices and higher construction costs because of Covid-19 safety management measures,” he said.

The property market continues to draw interest amid the pandemic, with over 90 per cent of 120 units released for The Landmark condominium snapped up on its launch weekend.

About 110 units were sold as of Sunday, representing some 30 per cent of the total number of units at the 99-year leasehold project in Chin Swee Road.

The units went for at an average price of $2,250 per sq ft (psf). About half of them are one-bedroom units with a starting price of $1,955 psf.

Most of the buyers are Singapore citizens and permanent residents, said developer Landmark JV on Sunday (Nov 29).

Located on the northern foothills of Pearl's Hill, The Landmark comprises a single 39-storey tower of 396 one- to three-bedroom units, five decks of lifestyle facilities, as well as views of the city skyline and southern coastline.

It is expected to obtain a Temporary Occupation Permit in March 2025.

Landmark JV is a joint venture between MCC Land, SSLE Development and ZACD Group. The partners bought the site through a collective sale of the former Landmark Tower in May 2018 for some $286 million or $1,406 psf per plot ratio. This includes a lease upgrading premium of $57 million. They also had to buy some adjoining state land, reported The Business Times.

In the light of the Covid-19 pandemic, sales bookings were done virtually from five locations, such as the project's sales gallery as well as the offices of marketing agencies ERA Singapore, Huttons Asia, PropNex and SLP International.

Mr Ken Chew, general manager of SSLE Development, said: "The positive response from home buyers on the launch day bears testimony to our commitment to price the project to sell.

"We hope that a higher live-in population within and around the Central Business District will add more vibrancy to this neighbourhood."

HOME owners are trading up, spurred to take that plunge of a bigger financial committment by the work from home trend which has led to a surge in sales of large condos.

These are defined as more than 1,200 square feet (sq ft) in size. The most popular large units are in the 1,200 - 1,400 sq ft size as these are more affordable compared to even bigger ones.

Christine Sun, OrangeTee & Tie head of research & consultancy who analysed the trend, noted that in July and August alone, 208 units above 1,800 sq ft were sold at a median price of S$3.35 million, a trend that Ms Sun described as "pretty amazing amid the pandemic and economic slowdown".

The number is higher than in the same period of 2018 (187 units) at a median price of S$3.25 million and 201 units in 2019 with a median price of S$3.6 million, she said.

The Avenir and Jadescape saw the highest number of homes above 1,800 sq ft sold, seven and five respectively. The median unit price at The Avenir - located in the core central region - was S$3,218 per sq ft with median price of S$7.6 million. Jadescape's median unit price was S$1,604 per sq ft with median price of S$3.4 million. Jadescape is in the rest of central region.

At The Penrose which was launched late last month, five units larger than 1,200 sq ft were sold, based on URA/Realis figures as at Oct 2, 2020, said Wong Siew Ying, PropNex head of research and content. Prices of the five which have four bedrooms range from S$2.2 million to S$2.3 million.

In total there are 54 four-bedroom units at Penrose, ranging from 129 to 130 sq m (1,388.5 - 1,399.3 sq ft). These 4-bedders account for 9.55 per cent of the total 566-unit development.

Overall, in August, 582 condos of over 1,200 sq ft were sold, up 22.5 per cent from July's 475, and 44.4 per cent from August 2019, said Ms Sun.

The number is also a 27-month high (751 units in May 2018) and above the two-year average of 338 units (September 2018-August 2020).

"If we remove the low numbers sold in April-May 2020 during the circuit breaker period, August 2020 sales are still higher than the 22-month average of 359 units," said Ms Sun.

The increase was across all market segments, and from new projects and resales. New sales in August of 147 touched a three-year plus high; the previous record was 197 units in April 2017.

New projects with the highest number of large units sold from January to August 2020 were Jadescape (108), Treasure at Tampines (98), Parc Clementis (54) and Forett at Bukit Timah (28) and Parc Esta (28).

Resales of 432 was a tad lower than the previous record of 440 units in July 2018.

The 582 sales comprised 127 units in the expensive core central region, 274 in the rest of central region and 181 in the more affordable outside central region.

Rising prices did not deter buyers from upsizing.

In July-August 2020, the median unit price of large units was S$1,319 per sq ft, 3.5 per cent higher than the same period in 2019 and 29.2 per cent higher than the same period five years ago, she noted.

The rising demand for large units may be related to the work-from-home trend where more could be buying bigger homes or needing more space for work and leisure, said Ms Sun.

As well, the price resilience of properties in Singapore may have driven some to purchase bigger units now for fear that the price increase may put such units out of reach in future.

Private residential property prices for 2020 as a whole may end in positive territory, some analysts say, after prices rose 0.8 per cent quarter-on-quarter (q-o-q) in Q3, nudging the overall price index up 0.1 per cent year-to-date.

"The coronavirus crisis may be changing the property market and consumers' buying behaviour in more ways than anticipated," said Ms Sun.

Many have been working from home since the start of the pandemic and Covid-19 could be causing a permanent shift towards remote-working in some organisations.

A growing number of companies and employees are already adjusting their mindset to adopt more flexible, work-from-home arrangements for the long term, especially for organisations that can save rental costs with the need for a smaller office space, she said.

"The substantial amount of time spent in one's apartment may have led some people to reconsider the function of a home beyond protection, social interaction and emotional bondage among family members," said Ms Sun.

An extra room or study helps create a more conducive workspace, providing clearer space boundaries between work and leisure as the lines could be blurring for some individuals.

The sweet spot for large units remains in the 1,200 - 1,400 sq ft size range. A 1,200 sq ft condo usually has three bedrooms or 3 plus study and some even will squeeze in four bedrooms. From January to August, 1,162 such units were sold.

The trend may signal a need for developers to consider reconfiguring their unit mix for future developments to include more large units or have more fittings or facilities to support the culture of work from home, said Ms Sun.

"For instance, instead of building more communal facilities like pavilions or BBQ pits, they may build more co-sharing spaces or libraries that are equipped with WiFi or 5G network."

They may also build more units with study rooms, carve out dedicated spaces or create convertible areas within the unit to set up a home office space, she said.

The Hong Leong group sold 60.3 per cent of its Penrose condominium over its launch weekend, with the reception among buyers in line with recent data showing bullish new home sales defying the ongoing coronavirus pandemic.

As of 5pm yesterday, 341 units out of 566 in the 99-year leasehold development at Sims Drive had been taken up, said Hong Leong in a media release.

The units were sold at prices starting from $788,000 for a one-bedroom apartment, $943,000 for a two-bedder, $1.33 million for a three-bedder and $2.11 million for a four-bedder, said Hong Leong yesterday.

The project's apartment sizes range from 474 square feet (sq ft) for a one-bedroom unit to 1,389 sq ft for a four-bedroom unit.

Take-up was good across all unit types, with the selling prices working out to $1,500 to $1,700 per square foot, said Hong Leong.

It added that nearly 85 per cent of the weekend's buyers were Singaporeans, with permanent residents and foreigners making up the rest. "Keen interest was also seen from HDB upgraders across areas islandwide," the company added.

Sales of new homes - mostly newly-launched condominiums - hit an 11-month high last month, defying the Hungry Ghost Month, and more importantly, the pandemic, the resultant recession and a surge in job losses.

Market observers have ascribed this to "pent-up demand" after Singapore's two-month circuit breaker upended sales and planned launches.

But other reasons given for the surge in new home sales were more buyers parking their money in property, which they see as a safe-haven asset amid an uncertain economy and volatile markets, and record-low interest rates making it seem a "good time" to get a home loan.

Ms Betsy Chng, head of sales and marketing at Hong Leong Holdings, said "timing and sensitive pricing" were the main factors behind the good response to the Penrose's sales launch.

"Given the current climate, it is crucial to identify the right timing and price our projects thoughtfully according to market sentiments and each project's value that includes location, design and quality interiors," she added.

The project is jointly developed by Hong Leong Holdings and City Developments, another member of the group. The District 14 development, which comprises five 18-storey towers, is a short walk to Aljunied MRT station and near the Pan-Island Expressway and Kallang-Paya Lebar Expressway. The Central Business District is about 15 minutes' drive away.

Property experts said new home sales may start to moderate in the coming months as pent-up demand from local buyers is absorbed into the market. But the gradual reopening of the economy and the setting up of fast lanes for essential travel could also result in more foreign demand for private homes here.

In line with Covid-19 preventive measures, balloting and booking of Penrose units were done virtually via Zoom.

Online balloting began on Friday to determine the queue sequence of buyers for booking day, which started on Saturday.