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  • Writer's pictureChristine Kang

Should we Buy during Crisis ?

dated 23 March 20

Is it a good time to buy Singapore property during crisis?

Buying a property can bring joys to many people, especially for buyer who is becoming property owner for the first time. Second time buyer may also feel as excited about buying another new property or upgrading to a more conducive home with different desirable lifestyles.

Whereas, seasoned property investors, who usually conduct researches on property markets and acquire right information from their real estate agents, may attempt to go for another bite of the cherry. This group of investors, who are regulars in the property market, constantly follow-up with updated information, can easily increase their portfolio of wealth through property investments.

Inevitably, real estate agents, whom the abundant resources and wealth of experiences most investors tap on, have become part of this property investment eco-system.

which is the best buy property

Nevertheless, no matter which group of property buyers we belong to, at some point in time, we will be wondering which property is the best buy?

And what are the pitfalls to look out before plunging into our purchases, especially during a crisis – like the COVID-19 pandemic?

Most buyers will look for the best product with the best deal, but there are also some who dread going through the buying process and ended up missing out some good deals.

So, is it the right time to buy during a crisis? Will the residential property prices go down further? Is timing the market a way to get the best deal?

Analysing the Past Trends of Residential Property Market

The private property prices in Singapore have been on an upwards trending for the last 3 decades. Along the way, there were numerous economic and financial crises, which inevitably affected the buying sentiments and prices in the property market.

1985 First Recession

1985 first recession  is property price affected

In 1985, Singapore went through its first post-independence recession partly affected by the worldwide slumps in petroleum and marine industries.

It had resulted in declining demand for Singapore's goods and services, especially shipbuilding and ship-repairing, as well as semiconductors and electronics. It was also partly caused by the loss in Singapore's international competitiveness, due to a high wage policy in the 70s and overvalued currency.

The property index saw a gradual decline in early 1980s to a low in Q2 1986.

It gradually climbed and was followed by a spike in mid-1990s to a peak in Q2 1996, over a 10-year period. The heightening of interest in property buying in mid-1990s was due to overwhelming demands for housing and growing affluence of Singaporeans, where property became part of their investment portfolios.

Singapore Private Property Price Index always on up trend

1997 Asian Financial Crisis

In 1998, despite the strong economic fundamentals, Singapore was not able to avoid the ripples from the Asian Financial Crisis started in Thailand, following the collapse of Thai Baht in July 1997. Singapore's economic growth fell from a healthy 8% recorded in 1997 to a miserable 1.5% in 1998. The property index plunged sharply to a low in Q2 1998 at 72.5%.

strong economic fundamentals in Singapore smooth pass through 1997 asian financial crisis

The government implemented various measures to ease the economy, after realising that stimulating domestic demands was inadequate in a downturn attributed to external factors. The property market saw a V-shape recovery to 100.2% in Q2 2000, within 2 years.

2001-2003 9/11-SARS

In 2000, our economy recovered after the Asian Financial Crisis and boomed at a growth rate of 9.5%. However, this short stint of economic boom was subsequently slammed by the bust and the decline in the electronic and computer chip industries.

The value of the Singapore dollar fell, and the economy slumped in 2001. It did not help with the September 11 attack in New York, causing the stock markets to plunge. As a result, Singapore posted negative growth rates in 2001.

singapore property price is not affected by the new age epidemics

The slight economic recovery in 2002 was slowed by the SARS outbreak in 2003. The epidemic affected the tourism and businesses in Singapore. The economy shrank 11.8%, the biggest contraction then. The property index glided to a low in Q2 2004 at 80.4%, but still higher than then previous low in 1998.

Together with the economy, the property market began a U-shaped recovery from 2004. The property index hit a subsequent high in Q2 2008 at 126.7%, over 4 years. This high was higher than the previous peak in 2000.

2008 Global Financial Crisis

In 2007, the Global Financial Crisis began with a depreciation in the US subprime mortgage market. It eventually developed into a global banking crisis with the collapse of the Lehman Brothers investment bank in September 2008.

Singapore became the first country in East Asia to succumb to economic recession.

Just like the stock markets, the property index dipped sharply, to a low of 95.3% in Q2 2009. However, this new low was higher than the previous lows.

As the economy was recovering, the property market made a V-shaped recovery and surpassed its previous peak in 2010, within 1 year.

With the fast moving property prices, the government started introducing property cooling measures in 2009 to control the rising property prices.

When it recorded a new high at 154.6% in Q3 2013, the government implemented a series of cooling measures in 2013 alone to curb the buying sentiments, in order to bring the property prices down.

2015 Singapore Economy Slowdown

In the beginning of 2015, Singapore's economy softened amidst a sharp fall in oil prices and global financial market volatility.

singapore with good economical fundamentals is not affected by 2015 singapore economy slowdown

This was mainly due to the slowdown in China and increasing domestic in-sourcing in the United States and China, instead of importing from Asia.

Moreover, business of our marine and offshore industry was also affected by the lower demand for oil-rigs due to low oil prices. The property index declined gradually for almost 4 years from mid-2013 to a low of 136.6% at mid-2017.

Apart from the high in 2013, it is important to note that this low was, in fact, not only higher than all previous lows but also the previous highs.

Thereafter, the private residential prices began rising rapidly.

The official data in Q2 2018 showed that private home prices had risen to its highest point in the preceding 4 years. Analysts, therefore, predicted that property prices could very soon recover to its 2013 peak level.

In July 2018, this fast growing trend prompted the government to impose another round of property cooling measures, the second in less than 2 years, to curb the rising property prices.

Singapore’s Residential Property Market - Trending Upwards

As we can see from the past trends, the Singapore's residential property market was resilient and was able to recover from crisis after crisis. It has been moving on an upwards trend for the past 3 decades. The next high is higher than the previous highs, while the next low will always be higher than the previous lows and possibly previous highs.

Gain from property investment  property price index is on upwards trend

One of the reasons for this trend is that owners will always have an interest in preserving their property entry prices, whether acquired directly from the developers or resale market.

They will never want to sell their properties at a loss (ie. not below the entry prices), and are looking forward to gain from the capital appreciation.

How about 2020 COVID-19?

The residential property index for Q4 2019 is 153.6%, just 1% point to the highest peak of 2013. With the unfortunate outbreak of COVID-19 pandemic, will the property market continue to rise, or will it dip?

The development of this pandemic has no end in sight, which experts has assessed to last until at least end of 2020. Coupled with the crashes in the financial markets globally in recent weeks due to fear of the pandemic, especially in the US and Asia markets, it is unavoidable that the economy will take a great hit.

Most people will anticipate that the sentiments in Singapore’s property market will also be affected in the near-term.

Surprisingly, some recent new launches of private condominiums suggested otherwise. The show flats of these projects were met with overwhelming response from the buyers amidst the COVID-19 outbreak.

The “M” sold 392 of its 522 units, while Lexus Hills sold all its final units, in just over two weekends.
Wing Tai sells its popular units at The "M"

Lessons from SARS

During the SARS outbreak in 2003, private residential market did not see a significant price correction. The first SARS casualty appeared in Singapore in late February 2003 and Singapore was eventually removed from the WHO list of SARS affected area on 31 May 2003, enduring about 3 months of healthcare crisis.

During this period, Singapore’s economy contract by 11.8%. It began the path of recovery and achieved a growth of 8.5% shortly in 2004.

According to the All Residential Price Index, the correction was only shifted by 1.2% from Q1 2003 to the lowest in Q2 2004.

Noteworthy, the prices maintained generally flat in that period, but the transaction volume saw a V-shaped recovery in private residential sales.
The total sales volume recovered from a -41% with 1,407 units sold in Q1 2003 to a jump of 147% in Q2 2003 with 3,481 units sold.
increase in sales volume of new private residential property during SARS period

As we can see from the chart above showing the sales volume of new private residential market, the number of units sold increased from 320 to 2022 during the SARS period despite the slight dip in property prices.

Similarly, the number of units sold for the resale private residential also increased from 661 to 1102 over the same period.

increase in sales volume of resale private residential property during sars period

The large sales volume could be attributed to buyers going for a good bargain at the low prices, as it was basically a buyers’ market.

Similarly, there may be a slight correction in the property prices due to COVID-19 pandemic, which would affect Singapore’s economy to a large extend.

However, the overall price correction may be insignificant as the majority sellers have the holding power and are not willing to sell any lower than their purchase prices.

Nevertheless, the lowered prices, coupled with the tenancy to relate crisis with the best timing to hitch a good bargain, could propel buyers into the market, especially investors.

Evidently, this phenomenon is also evident in recent months after the outbreak of COVID-19. The sales volume for new private home in February 2020 has more than doubled the sales for the same month in 2019.

new home sales increase amid virus outbreak

Nonetheless, buyers can still look out for possible good bargain from property auctions as minority of owners who are not able to service the mortgage loan may be compelled to foreclose their units.

Post COVID-19

Following the sell out in the stock markets for fear of economic uncertainty, which bring down all the stock prices, savvy investors will begin to enter the financial market to cherry pick their choices for low-priced stocks.

Eventually, when the stock markets recover in 1 to 2 years time or it may go into a bull run, this group of investors will reap their profit from the stocks as they will not want to lose their gains back to the market.

Consequently, when the investors divested their portfolio in stock market, they will look for some less-volatile investments to continue growing their gains.

influx of property investment will push the property prices up into the next new high

This will likely to be in the property market. And this new influx of investment funds into the property market will again push up the property prices towards another new high.


Based on the past trends in Singapore’s private residential property market, we can deduce that :

1. The Singapore residential property prices will continue to be moving in an upwards trend.

2. The COVID-19 pandemic may have a little downward correction on the private residential property prices, but the sales volume may rise significantly.

3. The property prices are likely to shoot up after the COVID-19 pandemic, after investors channelled their gains in stock markets.

In conclusion, it does not matter when we enter the property market. There is hardly any good or bad time.

Importantly, it is about whether we can pick a good unit at a good price. Eventually, we should be able to gain from the capital appreciation in the longer-term when the prices continue moving upwards.

For assistance in property purchase, sale or rental, please feel free to contact me @ +65 94742623 for a non-obligatory discussion.


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a professional real estate consultant christine Kang
Trusted real estate professional @+65 94742623

I am a Real Estate professional with proven records and 10 years’ experience in helping clients to acquire their dream homes and fulfilling their property investment goals. Skilled in facilitating purchase, sale and leasing of commercial, industrial, private residential and HDB properties, I enjoy my interactions with clients and find joys and sense of fulfillment whenever they found the properties that met their needs or when they benefited from their investments in the properties that I had helped them purchase.

Get a one-time period of free consultation@+65 94742623

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