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  • Writer's pictureVivian Chong

Why Singapore's Property Market Remains Resilient Through COVID-19

Updated: Jan 15

Remains Resilient

"Singapore recession forecast for 2020 worsens to between -4% to -7%." (Source: Business Times 26 May 2020)

"Singapore economy could be headed for its worst-ever contraction this year." (Source: Straits Times 26 Mar 2020)

"Singapore cuts 2020 economic forecasts for the third time on coronavirus concerns." (Source: CNBC 25 May 2020)

It is no news that Singapore is heading into a recession this year, possibly the worst recession since independence.

"At this juncture, there remains significant uncertainty over the severity of the downturn, as well as the eventual recovery." ~ Monetary Authority of Singapore ~

With all the gloom and doom, it is inevitable that property owners and investors are fearful. Will the Singapore property market crash? Will property prices tumbled? Can the Singapore property market remain resilient through COVID-19?

In all honesty, we know COVID-19 is an unprecedented pandemic and cannot be compared to the previous epidemic or crisis. However, it is helpful to examine how our property market reacts during the previous crisis and post-crisis.

We will look into the 1997 Asian Financial Crisis, 2003 Sars Epidemic, and the 2007 Global Financial Crisis. Let's dissect the numbers and hopefully, it provides clarity to the possible direction our property market will head.

Let's go!

Photo Source: Pexels
Photo Source: Pexels

1997 Asian Financial Crisis (AFC)

The Asian financial crisis, which took place in July 1997, was a sequence of currency devaluations and other events that spread through many Asian markets.

Singapore could not escape the effects of the crisis. Stock and property markets took a beating. The GDP growth for 1998 was 1.5%, a slide from an 8% rise the year before. The economy rebounded strongly in 1999 with a 5.4% growth in GDP.

Let's look at how Singapore property market fare during this period.

Average Transaction Volume By Region


Transaction volume fell the most in the Outside Central Region (OCR). Buyers were fearful to commit to a property when the economic outlook is gloomy and their jobs are in limbo.

In the Core Centre Region (CCR) and Rest of Centre Region (RCR), transaction volume dropped too but not as drastically. This could be due to the strong holding power of property owners in these regions.

Transaction volume returned within 9 months since the crisis erupted. While volume was most strongly impacted in the OCR at the onset of the crisis, it also bounced back most strongly at 39%! This is most possibly due to the pent-up demand from buyers who adopted a wait-and-see attitude during the crisis.

Average Transacted Prices (Non-Landed) By Region


Prices dropped across all regions. It is interesting to note that prices dropped significantly only 3 months after the crisis started.

Prices bottom-out in the last quarter of 1998. By this time, prices have fallen 42%, 45% and 30% in the CCR, RCR and OCR respectively.

It took 1 year and 3 months for prices to bottom out in this Asian Financial Crisis,

2003 Severe Acute Respiratory Syndrome (SARS)

SARS is a viral respiratory illness. It was first reported in Asia in February 2003. Over the next few months, the virus spread to countries in North America, South America, Europe, and Asia before it was finally contained in July 2003.

During the Sars epidemic, Singapore’s GDP dropped 7% in the first quarter and recovered subsequently. The overall growth rate was 1.1% for the Year 2003.

Transaction Volume and Prices


From the above chart, we can see that the transaction volume in Mar 2003 during the onset of SARS was 462 units. The average price was $539psf.

Transaction volume in July 2003, when SARS was finally contained, increased to 1,682 units. This was a whopping 264% increase! The average price was $543psf, up 0.7% from Mar 2003.

Historically, financial crises have a greater impact on selling prices & transacted volumes in the private property market than viral epidemics.

2007 Global Financial Crisis (GFC)

The 2007 Global Financial Crisis was a severe worldwide economic crisis.

It began in the United States with a depreciation in the subprime mortgage market. Soon it developed into an international banking crisis as investment bank Lehman Brothers collapsed on September 15, 2008.

Massive bail-outs of financial institutions and other palliatives monetary and fiscal policies were employed to prevent a possible collapse of the world financial system. Asian markets like China, Hong Kong, Japan and India etc were immediately impacted. Singapore could not escape either, despite an average annual growth rate of 8% from 2004 to 2007.

Average Transaction Volume By Region


Transaction volume in CCR fell by 89%, followed by 86% in RCR. The Global Financial Crisis had hit many countries. With CCR and RCR being a favorite with many foreigners, it is inevitable we see such a steep fall here.

It took around 19 months for transaction volume to bottom out, It is impressive to note that once investors' confidence returned in Feb 2009, transaction volume in OCR bounced back by 124%, followed by RCR at 183% and CCR by 191%!

Average Transacted Prices (Non-Landed) By Region


Again, we saw from the above chart that prices in CCR and RCR were most volatile during GFC. Prices tumbled by 46% and 33% respectively, whereas OCR saw a more gentle decrease in price at 17%.

COVID-19 As Compared To Previous Crisis

As mentioned above, COVID-19 is an unprecedented pandemic. To date, there are more than 6.8million people infected worldwide, and close to 400,000 deaths. In Singapore, we have 38,000 people infected, and 25 have died from the virus.

For the first time in Singapore's history, we are going through an almost 2 months Circuit Breaker Period, where offices, schools, entertainment outlets and worship places were shut down. Businesses have come to a standstill.

Singapore's Finance Minister Heng Swee Keat came out with 4 budgets - Unity, Resilience, Solidarity and Fortitude Budgets - within a span of 4 months. These budgets are worth close to S$100 billion - or almost 20 percent of Singapore's GDP.

"This is a landmark package, and a necessary response to an unprecedented crisis," ~ Finance Minister Heng Swee Keat ~

There is no doubt COVID-19 is a big test for Singapore.

Nevertheless, let us examine why the Singapore property market will remain resilient throughout this crisis.

Why Singapore Property Market Will Remain Resilient

Why Singapore Property Market Remains Resilient Through COVID-19 Crisis
(Photo Source: Pixabay)

Cooling Measures Implemented

Singapore's government implemented a total of 8 rounds of cooling measures after the last Global Financial Crisis.

Some of these measures include:

(1) Seller Stamp Duty (SSD), which imposes stamp duty on sellers who sell their properties within 3 years of purchase;

(2) Additional Buyer's Stamp Duty (ABSD), which imposes additional stamp duty on Singaporeans for purchase of 2nd and subsequent properties, as well as foreigners who are buying properties in Singapore.

(3) Loan To Value (LTV) for second and subsequent properties, which limits the loan buyers can take for the purchase of 2nd and subsequent properties;

(4) Mortgage Servicing Ratio (MSR) for HDB properties, which limits the loan buyers can take for the purchase of HDB properties.

(5) Total Debt Servicing Ratio (TDSR) for all mortgage loans, which limits the loan buyers can take for the purchase of properties.

Cooling Measures Over The Years
Singapore's Cooling Measures Implemented Over The Years (Source: EdgeProp)

These measures have successfully prevented speculation and ensured Singaporeans' ability to service their property mortgage. It also successfully curbed the increase in property prices and thus prevented a property bubble from forming.

Importantly as we can see during the current COVID-19 crisis, these measures allow property owners to have better-holding power. This prevents fire-sales, bank foreclosures and bankruptcies, all of which will impact our property market deeply.

Government's Package To Aid Homeowners During COVID-19 Crisis

As part of the measures to help individuals and SMEs to tide over the crisis, the Monetary Authority of Singapore (MAS) allows homeowners to defer their loan to the end of the year.

Government's Package To Aid Homeowners During COVID-19 Crisis

HDB owners who face difficulty in upkeeping their monthly instalment can also approach HDB for deferment of loan.

On top of that, the government will also extend the remission of Additional Buyer's Stamp Duty (ABSD) for married couples who bought their 2nd property and are selling their existing matrimonial house. The remission period will be extended to 1 year from the existing 6 months.

Again, these measures allow property owners to have holding-power to tide through the crisis, which in turn prevents prices from tumbling.

Historical Property Prices Track Record

Historical Property Prices Track Record
Historical property track record shows that property prices always rebound after a crisis.

From the graph above, we see that property prices always rebound after a crisis. The increase in price is always more than the correction which took place during the crisis.

Recovery took place after SARS in 2003. It increased by a whopping 112% before starting to come down in 2007 due to the Global Financial Crisis,

Prices move up by 82% after the GFC, before it corrects again due to the government's cooling measures. And it moved upwards by 40% before COVID-19 hits our shores.


Fundamentals of Singapore's property market is different as compared to the previous crisis. This is largely due to the measures that the Government undertook after the last financial crisis.

Coupled with the government's measures to help Singaporeans tide over the crisis, as well as historical track records of Singapore's property market post-crisis, Singapore Property Market can and will remain resilient through COVID-19.

Having said that, it is anybody's guess how long this pandemic is going to last. We can only take reference from the past, to have a gauge of what may happen to our property market.

Any investment in property should be done with a long-term view. Buyers should assess your own financial situation and decide if this is the right opportunity to make the move.

If you need to discuss further, do make an appointment and let's share our opinions :)


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About The Author

Vivian Chong

Vivian is an experienced real estate agent who has been in the industry for 18 years.

Over the years, she has transacted numerous property deals including HDB and private properties. She is well-versed in policies and regulations involving the sale and purchase of residential properties. She has also handled many transactions involving complicated situations like contra, divorce, administration/probate cases, and decoupling / part-share purchase. Vivian is also a mother to 2 boys. Being a real estate mom allows her to spend more time with her children as they were growing up. Both boys are avid footballers representing their schools and clubs. She loves watching their games and hardly misses a game whenever they play.

Vivian is an active real estate salesperson and team leader. Call her at 98577714 for your real estate matters, or if you are looking to join the real estate industry.



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