SINGAPORE (EDGEPROP) – Prices of private residential properties increased by 2.1% in 4Q2020, compared with the 0.8% increase in the previous quarter, according to URA data.

For the full-year 2020, prices of private residential properties increased by 2.2%, compared with a 2.7% increase in 2019.

The price increase in residential properties was mainly driven by non-landed properties in the Rest of Central Region (RCR) and Core Central Region (CCR), observes Christine Sun, senior vice-president of research & analytics at OrangeTee & Tie, where prices rose by 4.4% and 3.2% q-o-q respectively. Meanwhile, the Outside of Central Region (OCR) saw prices of non-landed properties increase by 1.8% q-o-q.

In 4Q2020, a total of 2,603 private residential new homes (excluding ECs) were sold, 6.5% higher y-o-y, indicating “that there are renewed positive sentiments in the property market”, comments Desmond Sim, head of research for Southeast Asia, CBRE.

“This can be attributable to the healthy take-up of newly launched projects that are well-located and relatively affordable, and more importantly, the strengthening purchasing power of investors from leveraging on low interest rates,” Sim says, pointing to new launches The Linq @ Beauty World and Clavon that were launched in 4Q2020 and have achieved take-up rates of over 70%.

There has also been a “significant” increase in resale transactions, rising 81.4% y-o-y for 4Q2020, says CBRE Research. Resale transactions accounted for 61.3% of all sale transactions in 4Q2020, compared with 49.2% in the previous quarter.

For the whole of 2020, developers sold a total of 9,982 private residential units, compared with the 9,912 units in the previous year.

“Emboldened by 2020’s sales performance, developers are likely to capitalise on this sales momentum to clear their inventory and a relatively strong project pipeline of launches in 2021 can be expected,” adds Sim.

On the other hand, for the whole of 2020, rentals of landed properties decreased by 2.7% while rentals of non-landed properties decreased by 0.5%, according to URA data.

Occupancy rates for private residential properties excluding EC fell from 93.8% in 3Q2020 to 93% last quarter, observes Sun.

“There seems to be more rental demand from overseas Singaporeans, PRs, and long-term pass holders who have returned to Singapore in recent weeks. They require a temporary place to stay while scouting for more permanent accommodation,” notes Sun.

“There are also more overseas students looking for rental units now. Some locals who have just sold their private homes or flats have also rented in the interim as they wait for the completion of their new place,” she adds.

Looking forward, “buyer sentiment is likely to improve further as global growth is expected to accelerate this year, underpinned by a gradual return to normality with the virus vaccines and wave of liquidity,” says Sun.