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Covid-19’s impact on Singapore Property

Author: Jessica Lim

21st October 2020


The COVID-19 infectious disease has undoubtedly affected the livelihood of many and brought about various uncertainties for both consumers and organisations. With affirmed cases increasing and travel limitations remain, China has one of the hardest hit and effect on Singapore as we’re connected monetarily and socially. As a prompt effect, development progress of different property advancement were hampered by a deficit of labourers, since Chinese specialists were either presented with Leave of Absence or totally not permitted to enter Singapore’s territory in the near term.

Observations and impact:

Residential: For private real estate projects, the quantity of new deals launched remains steady with a couple of ventures scheduled to be dispatched from end-February. While developers are still monitoring the circumstances, they are most likely going to continue with the launches as arranged so long as the situation in Singapore doesn’t worsen. The 5 year project deadline that steers away from extra buyer’s stamp obligation is a significant thought for developers to guarantee that their dispatch plans are met, so business procedures can resume in an ideal way.

Project engineers have also took vital prudent steps to guarantee the hygiene and tidiness of show-flats as to ensure the well-being of their staff and advertising operators. Operators have also been prompted to be extra careful and mindful about uplifting cleanliness awareness, and this effort will impart some form of certainty for potential buyers to continue viewing show-flats.

Office: Aside from businesses closing down during the unprecedented time, work-from-home measures being set in place by the government has also resulted in the decrease of demand for office and co-working spaces. With this shift of work style where everyone needs to go online, the quickened pace of innovation and digitalisation has driven the development of existing tech firms and production of new companies in the tech sector. In turn, this would lead to an increased in demand for office spaces from tech firms, both in adaptable workspaces and center spaces.

Industrial: While there are reports of steep decreases in assembling movement emerging from labour deficiencies in China, it is still relatively early for Singapore to roll out any critical improvements to the mechanical space take-up plans. Observations are in place to monitor how such requests will yield advances with the pandemic situation in China after the Chinese workforce is back to work.

Retail: Singapore’s retail property segment will be facing a difficult period in the near term with a downward trend in deals. Frightened by infection fears and the administration’s warning for occupants to stay away from swamped places, there is a significantly lower volume of customers in retail shopping centers, and F&B administrations are most likely going to endure a shot in deals. On the other hand, retail classes seeing strong interests includes clinical products and toiletries, thermometers, hand sanitisers and other cleanliness strengthening merchandise.

Best case — V Shaped recovery: In the most ideal situation where Covid-19 goes under control and cases ceases not just in Singapore but on a global level, we do expect that speculators and buyers will continue in their real estate chasing action, with more and more business activities resuming.

Worst Case — U Shaped recovery: If the COVID-19 Pandemic situation turns critical, it could greatly affect supply chains over an extensive period. In the case that the infection persists over time, there would be an added burden on the fabricating, retail and travel industry that substantially impacts the economy adversely. With ventures potentially hit by log jam in exercises and speculation, office and retail leases may post decays by 2–3% YoY. Private deals may confront more grounded headwinds emerging from a quieted monetary viewpoint.

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