property prices set to tumble

Singapore property prices set to tumble”. That was the headline (source Business Times 25 April 2020).

Another headline: “Half the developers likely to cut prices of Singapore new launches”. (Source: Business Times 5 May 2020)

Analysts predict up to 8% full-year drop in private home prices” (Source: Business Times 8 May 2020)

property prices dropped
Source: Business Times 25 April 2020
developers cut prices
Source: Business Times 5 May 2020

Sensational headlines like these strike a chord in our hearts almost instantly. It may instill fear in property owners and elicit excitements in property investors…if we take them at face value.

When I first read these headlines, I got very excited. Some home buyers I know have been waiting for the property market to crash to go for the kill. I have been keeping an eye for my clients for fire-sales. I am still waiting, unabated. So far, nothing in sight. Sigh.

Will developers cut their prices? Are they in dire straits with many unsold units? Are they desperate?

But didn’t we just read that WingTai sold over 75% or 392 units of The M condo over two weekends recently?

Didn’t CEL sell 77 units when they launched Kopar at Newton just before the circuit breaker began on 7 April? They sold another 8 units during the circuit breaker.

Examples of projects with units at special discounted prices 

parc clematis star buy
treasure at tampines discounts

I did a quick check on how some other new projects are doing since the circuit breaker (7 April to 9 May):

  • Florence Residences: 17
  • Treasure@Tampines: 16
  • Riverfront Residences: 7
  • Parc Esta: 5
  • Stirling Residences: 4
  • Jadescape: 4

Not too bad considering all show flats are closed. With sales still moving despite the closure, would developers consider big price cut?

I have one buyer who recently tried to ask the developers for discounts for new launches to no avail. Good try.

I then asked the project ICs for various projects to see if any developer is cutting prices. None. Sigh.

Don’t get me wrong, there are ‘star buys‘ at special ‘discounted’ prices in many projects (see above) but the discounts are not across the board discounts. They do not apply to the whole project except for selected units or stacks.  

(If you want to know what are other projects that have ‘star buys’, you can write me)

Do these headlines hold water? Or is it a case of expectations and ‘sentiments’ that don’t match reality?

Do these headlines hold water? Or is it a case of expectations and ‘sentiments’ that don’t match reality?

Will Our Property Market Buckle Under The Weight of an Unprecedented Pandemic?

This Covid-19 pandemic is the mother-of-all pandemics in modern history, with 212 countries and territories affected so far and fast reaching the 4 million mark.

In Singapore alone, we have already surpassed the 20,000 mark, with hundreds of new cases reported every day.

During the circuit breaker period from 4 May to 1 June 2020, all show flats are closed, and no house viewing is allowed. Even though there are still cases of transactions taking place via virtual tour and zoom, sale volume has dropped drastically.

There is no doubt the current unprecedented Covid-19 pandemic has a strong adverse impact of Singapore property market. Sales volume will drop for sure. But can we expect prices to tumble? And as much as 8%?  

Understandably, there are knee-jerk reactions. Just like our stock market nose-dived by 35% but recovered quickly by 25% level. 

Some home buyers decide to sit on the sideline, waiting for the dust to settle so that they can have a clearer picture where the market is going. On the other hand, some are not taking any chances and have gone ahead to buy in case there is a price hike after the Circuit Breaker due to pent-up demand.

Lessons From The Past

Many analysts like to compare our current Covid-19 pandemic with the SARS and H1N1 epidemics.

The Impact of SARS on Property Prices

SARS (Severe Acute Respiratory Syndrome) was first reported in Asia in February 2003. In the next few months that followed, it affected 26 countries and resulted in more than 8,000 cases and 744 deaths. But by 5 July 2003, World Health Organization (WHO) declared SARS contained worldwide.

In Singapore, it was contained two months prior, after 238 Singaporeans were infected and resulted in 33 deaths.

What was the impact of SARS on our property market?

impact of sars on property prices
(Figure 1) Source: OrangeTee & Tie Research & Consultancy

Based on research by OrangeTee & Tie (Figure 1), it shows that in March 2003 during the early stage of SARS, there were only 462 (non-landed) units sold. The average price was $539 psf.

The sales volume surged in July 2003, with a total number of 1,682 units sold, which worked out to an increase of 264.1%. The average price went up marginally to $543 psf, a 0.7% increase.

impact of sars on new homes sale
(Figure 2) Source: Orangetee & Tie Research & Consultancy

New homes sales volume increased by 531.9%, while prices dipped 8.7%.

For secondary market, both resale volume and prices increased by 66.7% and 4.7% respectively.

Despite the SARS outbreak, the total number of private property transactions (excluding EC) in 2003 was 10,386 (see Figure 3). The subsequent year, the volume went up by only 14% to 11,853. It was apparent, SARS or no SARS, people were still buying and selling houses.

home sales during sars
(Figure 3) Source: URA

The Impact of H1N1 on Property Prices

H1N1 was first detected in the United States in April 2009. 

Singapore reported its first confirmed case of H1N1 in late May 2009. By February 2010, an estimated 415,000 Singaporeans had been infected and 18 deaths were reported.

During this period of the H1N1 pandemic, how did the property market perform in Singapore?

impact of SARS on resale market
(Figure 4) Source: Orangetee & Tie Research & Consultancy

Research by OrangeTee & Tie (Firgure 1) shows that 2,113 units were sold in April 2009 at an average price of $787 psf.

In February 2010, six months before WHO declared an end to the H1N1 flu pandemic, the number of transactions had gone up to 2,809 units (32.9% increase). What was astonishing was the average price had gone up by 48% to $1,165 psf!

As for new homes, sales volume dipped marginally by 13.3% but prices increased by 45.9%.

For secondary home market, volume went up by 21.3% and prices by 23.7%.

In retrospect, we learn that the previous two pandemics had limited impact on property prices and sales volume

In retrospect, we learn that the previous two pandemics had limited impact on property prices and sales volume.

What Is Different Now?

Well, some may argue that this time around it’s different. The scale and impact of Covid-19 way surpassed that of SARS and H1N1. More countries are affected. The rates of transmission and death are much higher.

At this point of writing (numbers still going up by the minutes), more than 3.85 million cases have been reported in 212 countries, with more than 270,000 deaths.

SARS and H1N1 paled in comparisons.

With Covid-19, many countries in the world literally came to a standstill. Nations and major cities have lockdown in an attempt to contain the spread of coronavirus.

circuit breaker
For the first time Singapore has a 2-month long lockdown-like circuit breaker

Singapore is not spared. For the first time in our history, we are going through two-month circuit breaker where offices, schools, travel, places of worship and entertainments are all shut down. Almost all businesses came to a standstill.

To help the nation cope with this unprecedented pandemic, our government unveiled three rounds of relief packages to the tune of $59.9 billion, accounting for around 12% of the country’s gross domestic product. In contrast, the relief package for SARS was $230 million. There were no relief packages during H1N1 because we were recovering strongly from the aftermath of the Global Financial Crisis. The enormous scale of the Covid-10 relief measure speaks volume the magnitude of our current crisis.  

Our Finance Minister puts it aptly, “We are in extraordinary times. We need an extraordinary Budget to deal with both short-term and long-term challenges.”

“We are in extraordinary times. We need an extraordinary Budget to deal with both short-term and long-term challenges.”

Finance Minister Heng Swee Keat

Property Market Is More Resilient This Time

We have learned many hard lessons from our past crises.

Thanks to the Lehman Brothers collapse in 2008, which was due to the continuing subprime mortgage crisis, our government had put in place rounds of cooling measures to safeguard the same from happening to us and to prevent our property market bubble from forming.

After the Global Financial Crisis, our property market was recovering very strongly, albeit too strongly. So our government had to tame the wild runaway horse.

cooling measures
It took the 8th cooling measure on 9 Dec 2013 to finally cool down the property market

Cooling Measures

From 20 February 2010 to 9 December 2013, there were eight rounds of cooling measures. Some of the drastic measures include:

There were two additional rounds of cooling measures on 17 March 2018 and 6 July 2018.

The underlying principles of these cooling measures are to curb speculations and enforce prudence.

With policies such as TDSR and lower LTV for second and subsequent properties, investors have to commit more cash outlays. With these measures in place, home buyers and investors have more holding power

The underlying principles of these cooling measures are to curb speculations and enforce prudence.

Lifelines for Homeowners from the Government

It is not in the best interest of the nation to see our property market crashes under the weight of Covid-19. Hence our government will do what it takes to hold it up.

Our government recognises the extent of the impact of Covid-19 on many home owners and business owners that they very quickly rolled out some initiatives to alleviate the problems.

Loan Deferment

Banks have now allowed home owners to defer their loan payments up to 31 December 2020. This deferment gives home owners some reprieve to lessen their financial stress. As long as they can hold it together, there is no real urgency to dump their property.

Property owners today have more HOLDING POWER.

Furthermore, with home loan interest rates at a very low level, many eligible home owners are taking the opportunity to refinance, potentially saving them thousands of dollars in interest.

For HDB owners, there is an HDB Mortgage Arrears Relief in place. For those with difficulty in keeping up with their loan payments, they can now enjoy three-month suspension of late payment charges on HDB mortgage arrears and deferred payment of loan instalments for six months. (Source:

Property owners today have more HOLDING POWER.

Private property owners have avenues to help them tide through the Covid-19 crisis

Extension of Remission of ABSD for Married Couple

Under the ABSD regime, a Singaporean married couple who buy their second residential property can get a refund of the ABSD they had paid if they sell their first matrimonial home within six months. This applies to completed property. If it’s a building under construction (BUC), the six months applies after the issue date of the Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC).

The government had just announced on 6 May 2020, in view of the impact of the COVID-19 pandemic, this six-month deadline will be extended by a further six months.

To qualify for this extension, the couple’s second residential property must be jointly purchased on or before 1 June 2020. Another condition is the original timeline for sale of the first residential property must also have expired on or after Feb 1, 2020.

For more information, check out URA website.

Lifelines for Developers from the Government

The government not only extended the lifeline to individual home owners but also to developers. This is understandable considering construction works have stopped and show flats are closed during the circuit breaker.

On 6 May 2020, the Ministry of National Development rolled out these relief measures for developers with immediate effect:

developer relief measures
The government rolled out some relief measures for property owners and developers

Project Completion Period (PCP): Extended by 6 months for all kinds of projects. PCP is calculated from the date the developer was awarded the site until Temporary Occupation Permit (T.O.P.) date, which is five years. To qualify, the land must be bought on or before 1 June 2020, and the original deadline for completion was on or after 1 February 2020.

Remission of the Additional Buyer’s Stamp Duty (ABSD) for developers:  Developers have to pay ABSD which is 30 per cent of the land price. If they are able to complete and sell all the units of the project within five years, they can get back 25 per cent. This is also extended by 6 months. To qualify, the land must be bought on or before 1 June 2020 and the original timeline for commencement expires on or before 1 February 2020.

Qualifying Certificate (QC) regime for foreign housing developers: Any developer with foreign ownership (listed companies by default) must complete the project within five years from the time they bought the land and sell every single unit within two years after receiving TOP. If they fail to do so, the 10 per cent banker’s gurantee they paid to the government will be forfeited. With the relief measure, the deadline will be extended by six months.

What is the implication of these temporary relief measures for individual owners and developers? The six-month reprieve means they are not so kan cheong (desperate) to sell.

Will Property Prices Tumble?

So let’s go back to our original questions:

  • Will resale property prices tumble?
  • Will developers cut prices?

Honestly, I do hope prices will tumble. But my sentiment does not match reality.

The key is home owners today have more holding power than before. So you have to be very lucky to find a fire sale. And if you find one, most likely someone else will get ahead of you. You know Singaporeans are kiasu.

As for developers, they have already priced the new projects to sell with slim margins. They do recognise the risk and to avoid paying the hefty ABSD. For existing projects that are already launched, it is not realistic to expect them to slash prices (very rarely developers will do that). If they do so, they will incur the wrath of earlier buyers who have paid a higher price.

How would you feel if you have bought a unit at launch (which is supposed to be the cheapest price) only to find out now the prices are lower than yours?

With the current climate, it is a good time to enter the market, be it resale or new launch. For resale property, you might scoop up a good deal. For new launches, all projects are already competitively priced to sell. 

Learning from our past, market will rebound after every crisis, and it will rebound with a vengeance!

If you need help or advice, please feel free to whatsapp me or message me for a non-obligatory discussion. Or do like and follow my facebook page so that you can be informed of further update on property prices.

Based on the latest sales reports of new homes, 998 were sold in June 2020 and 1080 in July 2020. These numbers are pre-Covid-19 level.

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danny han pwp

Danny Han has always been in the people’s business, having spent 23 years as a church pastor, five years as an insurance agent, and the last 16 years as a property consultant.


Danny has a genuine interest in people and firmly believes in personal integrity. While helping homeowners with their property needs, their interest always takes precedence over his personal gains. Hence, Danny has consistently earned his clients’ complete trust and loyalty. Many of them have become his personal friends.


Danny received his Diploma in Mechanical Engineering from Singapore Polytechnics and Bachelor of Science from Oklahoma Christian University of Science and Arts in Bible & Psychology.


Besides keeping abreast of the property market trend and constantly equipping himself to better serve his clients, Danny is a passionate foodie, a weekend cyclist, and an avid hiker. 

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