Why Singapore Property Remains Resilient Through This Storm

Updated: Jun 9, 2020

I hope this article can help you sleep better at night as I seek to give you clarity on how the Singapore property market works and what are the pillars that stabilize it.

I would be upfront that we will definitely see price corrections in some segments due to a slow down in the global and domestic economy. As a real estate agent who receives real-time price updates from developers, I am already seeing some new launches giving discounts which would not be possible before Covid 19 hit our shores.

up to 100k discount for new launch in CCR
up to 100k discount for new launch in CCR

At the same time, I also see some other new launches selling almost every day. The following are the TOP 30 projects sold during the Circuit Breaker.

Top 30 project sold during Circuit Breaker
Top 30 project sold during Circuit Breaker

That being said, I seek to give a balanced view of the market with this article and hope it can help you with your investment acumen.

Recently a client called me from overseas, he told me, Chantel good news, I have received the green light from my board members and we would like to sell our Grade A office building. I hope to sell my assets in this country so that I can invest them in Singapore and China.

He went on to share with me his strategy of how he is going to place his money in the domestic airlines in China and also his desire to shift more capital into Singapore because he has confidence in the governance of Singapore in the long run and think it will be a good place to shift his funds here.

At the same time, I am also in the midst of finalizing a 2-year lease for a British Expat who is currently still in the UK. Due to travel restrictions, he is still not able to fly to Singapore, but he wants to tie down the lease first and hope to be here with his wife for the next 2 years if possible.

So why do these well-heeled foreigners want to be in Singapore?

I believe the key idea is that Singapore is stable.

It’s timely that at this point of writing, Prime Minister Lee just delivered a speech to address the nation. The headlines on CNA goes

“A stronger and better Singapore will emerge from COVID-19 crisis despite 'immense challenges': PM Lee”

Listening to the speech made me recognize 2 key points.

A Less Prosperous World

The term a less Prosperous World really struck me that there is an imminent economic challenge ahead of us. There will be businesses that will fold, people losing their jobs and limitations to international travels.

But at the same time, I also see new businesses thriving. Businesses in the technology and essential services are doing very well. I hear of news of people around making job switches to jobs with better pay and opportunities.

A Nation With A Plan

PM Lee also mentioned, “Singapore is well-placed to connect itself to new opportunities and create new jobs because of the country’s economic strengths...”

It helped me recognize that despite the challenges there is a way out and more importantly we are as a nation is ready to take on this challenge and have a good chance of making it work.

For me, this portion of the speech is important because it highlights a government that is frank about the challenging times and at the same time have a plan to deal with these challenges.

In times of crisis, I believe good governance is a key to recovery and good governance is supported by tenets of accountability, transparency and competence.

With The Looming Global Recession, Will Singapore Property Market Crash?

Singapore Property Market
Singapore Property Market

While it’s impossible to look into a crystal ball to project the actual movement of prices, there are some data and facts that will give us some clues to how the market will likely pan out.

After looking at the data and the measures in place, I believe, there will be a price correction in some segments of the market, but the market as a whole is unlikely to crash to prices seen in 2007 and here is why.

The following are 3 Key Reasons why current data, points to a resilient Property Market in Singapore

  • The Government’s role in regulating the market

  • Domestic Demand

  • International Demand

1. The Government’s Role In Regulating The Market

The illustration below will give you an idea of how the Singapore government balances the various influences on the property market and the measures (market stabilizers) that were put in place.

Singapore government regulate property market

The Singapore government’s approach in balancing the property market can be likened to a man walking on a tightrope. There are various measures put in place to stabilize the market to ensure a market that allows asset growth and minimal risk of property bubbles.

The Pillars That Stabilize The Property Market In Singapore

Total Debt Servicing Ratio (TDSR)

TDSR dictates the amount of loan a borrower can loan from a bank based on his/her income. The current TDSR rate is at 60%.

Additional Buyer Stamp Duty (ABSD)

This is an additional stamp duty a residential property buyer has to pay based on their nationality and property count.

Seller Stamp Duty (SSD)

This measure helps to reduce property flipping and property speculation. The seller has to pay a stamp duty for selling a property within a different period of holding period.

SSD rates
Seller Stamp Duty Rates

Loan to Value limits (LTV)

This is the amount of loan a borrower can loan base on the value of the house. Currently the LTV for 1st home loan is at 75%

That means, if you purchase a home at $1 million, the maximum loan you can get for the property is $750,000.

Government Land Sales (GLS)

There are land parcels that the government set aside for development of private property. This is one way that the government can use to monitor prices and control the supply of new private residential units.

Effectiveness Of These Market Stabilizers


This is an example of the various market stabilizers introduced at various stages to impact the property prices. As you can observe from the graph the measures introduced had been effective in moving the prices in a desired direction.

It is also important to note that the TDSR was introduced in 2013 when the market was heating up and the 2 round of ABSD was not able to bring down the price index. With the introduction of TDSR the property price index began to taper again.

What this means is that the property purchasers who enter into this market, has a much lower tendency to be in a position of being over-leveraged as compared to property purchasers before the Global Financial Crisis period who were not restricted by this borrowing ratio and borrowed more aggressively resulting in a lower ability to finance the property during a financial crisis.

Besides these market stabilizers that are in place, there are also other methods that property owners can use to stay afloat during this storm through creative financing and making use of mortgage deferment schemes, these methods will further strengthen property owners' ability to hold property and reduce the situation of panic selling.

2. Strong Domestic Demand

There will be strong demand for private residential properties from property owners who just went through Enbloc and HDB Upgraders.

Enbloc Owners