Comments on the URA Q3 2020 Real Estate Statistics

Continued climb of private home prices despite worsening economic conditions, while office and retail rents see an accelerated decline islandwide.

SINGAPORE, 23 October 2020 --



Tricia Song (宋明蔚), Head of Research for Singapore at Colliers International:

Private residential property prices in Singapore rose in Q3 2020 for the second straight quarter, on the back of pent-up demand amid worsening macroeconomic conditions.

Final statistics from the Urban Redevelopment Authority of Singapore (URA) on Friday, 23 October, showed that private residential property prices grew at an increasing rate, by 0.8% quarter-on-quarter (QOQ) in Q3 2020, unchanged from the flash estimates on 1 October, after rising 0.3% in Q2.

This brings private home prices to be up 0.1% year-to-date in 2020. Private home prices are now 2.7% above the most recent peak in Q3 2018 and 0.5% below its all-time peak in Q3 2013.

This came as both developer sales and secondary sales rebounded strongly post the circuit breaker since June 2020. Besides strong developer sales, the secondary market also recovered, with sales more than trebling QOQ and up 42.2% year-on-year (YOY) to 3,530 units in Q3 2020.

However, we note the pent-up demand has started to peter out; we expect the developer sales to slow down as economic realities and financial prudence sink in. We also expect 2020 developer sales to fall 10% to 8,900 units from the 9,912 units in 2019.

All in, we believe the overall private residential market is largely stable. With the resilience of the sales and price index up 0.1% year to date at this point, we now expect prices could be flat for the full year 2020.

Colliers Research Singapore comments on URA real estate statistics Q3 2020 Residential
URA Real Estate Statistics Q3 2020: Private residential properties

Price analysis by regions

The price increase in Q3 2020 was led by the landed segment (up 3.7% QOQ), while the non-landed residential segment was up 0.1% QOQ. Within the non-landed segment, Core Central Region (CCR) is the only region to see prices fall, as prices fell by 3.8% QOQ. Rest of Central Region (RCR) saw a price increase of 2.5% QOQ and Outside Central Region (OCR) prices rose 1.7% QOQ.

Core Central Region (CCR)

According to URA’s data, prices in the CCR declined 3.8% in Q3 from the previous quarter, after rising an unexpected 2.7% QOQ in Q2 2020. This brings CCR home prices to a 3.4% decline year-to-date. CCR home price index is now 6.0% below its recent peak in Q3 2018 and 8.3% below its all-time peak in Q3 2013.

A closer look at the transactions during the quarter suggests that there were sporadic distressed sales in the secondary market. The decrease in Q3 non-landed CCR prices could also be due to discounts offered at selected ongoing launches:

  • Leedon Green recorded 15 caveats in Q3 at a median price of S$2,546 psf, compared to 35 units sold at S$2,782 psf when it was launched in January 2020;
  • 8 Saint Thomas recorded 26 caveats in Q3 at a median price of S$2,780 psf compared to earlier units sold at S$3,100-3,200 psf; 
  • Fourth Avenue Residences sold 64 units in Q3 at a median price of S$2,258 psf, compared to its 2019 average launch price of S$2,400-2,450 psf;
  • The Avenir sold 18 units in Q3 at a median price of S$3,019 psf, compared to 18 units sold at a median price of S$3,244 psf in Q1 2020, when it was launched.

Rest of Central Region (RCR)

Home values in RCR rose 2.5% QOQ in Q3, after declining 1.7% in Q2. This brings RCR home prices to a year-to-date increase of 0.3%. RCR home price index is now just 1.2% below the peak in Q3 2013.

New launches in the city fringe did well in Q3 as they were priced competitively against their comparables. Penrose sold 388 units at a median price of S$1,540 psf. Forett at Bukit Timah sold 246 units at a median price of S$1,932 psf.

The mega ongoing projects such as Parc Esta, Stirling Residences and Jadescape have sold 88, 98 and 189 units respectively in Q3 and we note that their prices have inched up as they sold down their inventory. Stirling Residences, particularly, has seen its median price cross the S$2,000 psf mark at S$2,002 psf in Q3, compared to the median price of S$1,746psf during its launch in July 2018.

Outside Central Region (OCR)

Non-landed home values in OCR continued to rise at an increasing rate, with a 1.7% increase following a 0.1% increase in Q2 2020. This brings OCR home prices to a year-to-date increase of 1.4%.

The resilient trend could also be driven by upgraders’ demand, as public housing (HDB) prices as the Q3 HDB resale price index flash estimate also showed a 1.5% increase.

We believe the resilience in OCR home prices is due to their relative affordability and lack of future new supply in OCR.

Some earlier launches such as Treasure at Tampines and Florence Residences continued their progressive takeup:

  • Florence Residences sold 168 units at a median price of S$1,559 psf, compared to 148 units at S$1,513 psf in Q2 2020;
  • Treasure at Tampines moved 329 units at S$1,359 psf in Q3, compared to 184 units at S$1,357 psf in Q2.

Developers launched 3,791 uncompleted private residential units (excluding ECs) for sale in 3rd Quarter 2020, more than doubling the 1,852 units in the previous quarter.

Developers sold 3,517 private residential units (excluding ECs) in Q3 2020, more than doubling the 1,713 units sold in the previous quarter, and up 7.2% YOY on Q3 2019’s 3,281 units.

This will also be the highest quarter of developer sales since Q2 2013’s 4,538 units.

This brings year-to-September to 7,379 units, down 1.2% compared to the 7,469 units sold in the first nine months last year. There were 3,467 resale transactions in 3rd Quarter 2020, compared with the 933 units transacted in the previous quarter. Resale transactions accounted for 49.2% of all sale transactions in 3rd Quarter 2020, compared with 35.0% in the previous quarter.

There were 63 sub-sale transactions in 3rd Quarter 2020, compared with the 18 units transacted in the previous quarter. Sub-sales accounted for 0.9% of all sale transactions in 3rd Quarter 2020, compared with 0.7% in the previous quarter and is at the lower end of a range of 0.7% to 1.9% over Q2 2017 to Q3 2020. This means there is little speculation and distress in developer sales closed over the past three years.

Secondary (resale and subsale) transactions stood at 3,530 units in Q3, more than trebling from the 951 units in Q2, and a 42.2% jump YOY on the 2,482 units in Q3 2019. This brings year-to-September secondary sales to 6,601 units, just 3.0% below the 6,803 units in the first nine months of 2019.

The rebound in secondary transactions also point to genuine demand in the underlying market. There could also be more demand for readily available housing, given the delays in new housing completions.

Supply pipeline, vacancy, unsold inventory

In Q3 2020, with the gradual resumption of construction activities islandwide, 570 private homes (excluding ECs) obtained Temporary Occupation Permit (TOP), up from the 86 units completed in Q2, but still significantly below the 1,528 completed in Q1 2020 and the 1,093 private homes completed in Q3 2019.

Together with 891 private homes to be completed for in Q4, we expect 2020 completions to come in at 3,075 units, halved the forecast as of end Q1 2020, due to delays in construction over the past six months. The number of completions in 2020 will be significantly below the 10-year historical average of 12,948 units.

Based on URA’s projections, in 2021, completions will likely rise to 7,318 private homes, and further to 10,971 units in 2022, and 14,685 units in 2023, and 13,790 in 2024.

For the non-landed segment, with job losses and expatriate departures, the vacancy rate increased to 6.5% in Q3 from 5.6% in Q2. The peak vacancy was 10.4% in Q32016.

Unsold inventory eased to 26,483 units by end-September 2020, compared to 27,977 units in Q2 2020. Assuming the take-up of 8,000-10,000 units a year, it will take three to three and a half years to clear.


The overall private residential rental index declined for a second straight quarter, by 0.5% QOQ in Q3 2020, albeit slower than the 1.2% fall QOQ in Q2 2020. This brings the private residential rental decline in year-to-September 2020 to 0.7%. Overall rents are still 12.2% below the peak in Q3 2013.

The decline in Q3 2020 was led by the non-landed CCR segment (-2.1%). OCR and RCR actually rose 1.0% and 0.3% QOQ respectively. This brings rents at OCR to still be up 2.0% year-to-date, while RCR and CCR are down 1.0% and 1.2% year-to-date.

We expect overall rents to stabilise in 2020, as the economic fallout from the COVID-19 pandemic should be offset by the minimum new completions. While expat demand may decline due to loss of jobs and pay reductions, rents are unlikely to crash as completions in 2020 will be significantly below the 10-year historical annual average of 12,948 units, with potential delays, and vacancy remains tight below the historical average of 8%.

Outlook and forecasts

While the pick-up in the price index may seem at odds with the economic downturn and rising unemployment, the strength of the underlying property market can be attributed to: the unprecedented fiscal stimulus including job support schemes, the ultra-low interest rate environment and the buoyant public housing market that enables upgraders to afford new private homes. HDB resale price index has increased 1.5% QOQ in Q3 2020.

Buyer demand remains strong in well-priced city fringe and suburban projects, with a sweet spot of S$1 to 1.5 million per unit.

Major launches that had done well during Q3 were 566-unit Penrose at Sims Avenue which sold 388 units, and 633-unit freehold Forett at Bukit Timah which sold 246 units. Suburban projects launched earlier have also continued to sell down on pent-up demand.

On 28 September, URA announced a clamp down on the re-issuing of option-to-purchase (OTP) to the same buyers of the same unit, by developers. We have expected this to have a cooling effect on the developer sales going forward, as it should instill greater financial prudence in making property purchase decisions and prevent some marginal buyers from committing prematurely.

This policy appears to have had some effect so far. Based on the caveats download on 22 October, some 299 new private homes (excluding ECs) were sold in the first 13 days of October, representing a substantial slowdown from the 1,329 private home sales in the whole September. This could be also due to the pent-up demand petering out, as well as the lack of a major launch in October. We forecast full year 2020 developer sales may well be 8,900 units or just 10% below 2019’s 9912 units.

All in, we believe the overall private residential market is largely stable. With the resilience of the sales and price index up 0.1% year to date at this point, we now expect prices could be flat for the full year 2020.

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2020 will likely end with the first full year of negative islandwide office net absorption since the Global Financial Crisis.

Office rents have fallen while prices increased 0.2% QOQ after four consecutive quarters of decline, also reflecting better investor sentiment, particularly in CBD offices. Central Area showed more resilience in Q3 2020, as Fringe Area weakened significantly in both prices and rents.


URA’s Office Rental Index for the Central Region fell 4.5% QOQ in Q3 2020, the largest quarterly drop since Q2 2009’s -7.7%. This decline has come after remaining unchanged in Q2 2020, led by Fringe Area rents which declined 5.1%, after rising 1.1% QOQ in Q2 2020.

Meanwhile, Central Area rents also saw a further decline of 3.0% QOQ after falling 2.3% in Q2. Year-to-September 2020, the Central Region rental index has fallen 5.2% (Central Area -5.0%, Fringe Area -5.3%), and is 15.6% below the most recent peak in Q1 2015.


After four consecutive quarters of decline totalling 12.1%, URA’s Office Price Index for the Central Region bucked the trend to grow 0.2% QOQ after falling 4.3% QOQ in Q2.

The growth was attributed to prices in Central Area which grew 1.0% QOQ, again, after four straight quarters of decline (totaling -11.9%, Q2 2020: -4.3% QOQ). Fringe Area showed an opposite trend, with prices falling 4.4% QOQ after rising 5.1% QOQ in the last quarter.

Vacancy and completions

Islandwide vacancy of office properties tracked by the URA improved marginally sequentially to 12.0% from 12.1% despite net absorption contracting further by 205,000 sq ft (Q2 2020: -592,000 sq ft), due to withdrawals of supply in the market.

Year-to-September, islandwide net office absorption stands at -872,000 sq ft. The last time Singapore has ever witnessed a full year of net negative absorption was in 2009 (-237,000 sq ft).

Colliers Research Singapore comments on URA real estate statistics Q3 2020 Office
URA Real Estate Statistics Q3 2020: Office space


Based on Colliers’ Research, CBD Grade A office rents accelerated their decline to 2.3% QOQ in Q3 2020 to S$9.77 per sq foot. This brings YTD decline to 3.4%. Rent-free periods for CBD Grade A offices also increased from 1.3 months to 1.5 months.

Despite more employees being able to return to office effective 28 Sep 2020, we expect to see further rental declines in Q4 2020, while landlords continue to offer higher incentives, as leasing demand weakens further with the global economic slowdown. We forecast a 5% rental decline in 2020.

Meanwhile, Grade A and Premium CBD office vacancy expanded to 4.9% from 4.6% in Q2 2020, consequent to the negative net absorption, as incremental new take-ups in recently completed buildings (in Q2 2020) were marginal/negligible, while vacancies edged up in all micro-markets except Raffles Place/New Downtown’s premium buildings. CBD Grade A vacancy could rise further in Q4 2020 on expected contraction in net absorption.

Looking forward, we expect CBD Grade A rents to rise 5% in 2021 in line with Singapore’s economic rebound, with demand to be driven mainly by the technology sector. Already, it has been widely reported by the media that several technology firms are either expanding their headcount or consolidating their regional hub in Singapore. For flexible workspace, new take-up by operators could consolidate after building up a significant presence in the past three years.

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The retail sector showed a similar trend to office, with prices increasing 2.2% QOQ while rents slide further. Year-to-September 2020, prices have so far showed resilience, although Fringe Area rents collapsed 14.8%.


In Q3 2020, Central Region rents continued its third straight quarter of decline at -4.5% QOQ (Q2 2020: -3.5%), as Fringe Area rents collapsed by 10.4% QOQ (Q2 2020: +0.1% QOQ) versus a mild 1.4% QOQ (Q2 2020, -4.9% QOQ) contraction for the Central Area. This brings year-to-date Central Region rental decline to 10.0%, attributed to a 14.8% decline in Fringe Area rents and a 7.6% decline in Central Area rents.


Central Region retail prices held up better, rising 2.2% QOQ after contracting 1.5% QOQ in Q2 2020. The growth was attributed to Fringe Area prices which rose 5.5% QOQ as compared to a 4.3% QOQ decline in the previous quarter.

Meanwhile, Central Area prices slid 1.7% QOQ (Q2 2020: -0.6% QOQ). Year-to-September, retail prices for the Central Region have been relatively resilient declining only 2.5% given tightly-held quality retail assets and minimal transactions.

Vacancy and completions

Islandwide retail vacancy stayed flat sequentially at 9.6% despite net absorption contracting further at -538,000 sq ft (Q2 2020: -1.0 million sq ft), owing to a 570,000 sq ft supply withdrawal in the market.

Year-to-date, islandwide retail net negative absorption stands at -2.0 million sq ft, the worst ever experienced in a single year since year 2000 (data before year 2000 not available).

Colliers Research Singapore comments on URA real estate statistics Q3 2020 Retail
URA Real Estate Statistics Q3 2020: Retail space


Following the end of the Circuit Breaker lockdown on 1 June 2020, retail sales (excl. motor vehicles) growth showed sequential improvements in July and August at 19.3% month-on-month (MOM) and 0.1% MOM seasonally adjusted respectively. Online sales as a proportion of total retail sales have also retracted from May’s 24.5% to stabilize at about 11% in July and August.

On the ground, while more brands continued to close their physical operations – including British fashion brands Topshop and Topman in September – we observed higher shopper traffic in Orchard and heartland malls. REITs have generally reported a faster recovery in tenant sales versus shopper traffic, suggesting higher conversion rates and higher spending for those who shopped.

That said, looking ahead, we believe recovery of the overall retail market is likely to be slow, with minimal inbound tourist spending in the near term and structural challenges such as increasing competition from ecommerce, as well as high occupancy costs. As such, we expect average retail rents to decline 8% in 2020 and rebound rise 2.5% in 2021.

We find some reprieve in that annual average new supply will remain tight through 2020-2024 at 0.7% of stock (0.5 million sqft net lettable area) versus past 10-year average of 1.4%. Planned supply is mainly in suburban and fringe areas, where there are well-defined population catchments.

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Annabelle Taylor