© 2019 by Fraxtor. 


COVID-19 may have stifled global market sentiment, provoked fears of a recession and the intermittent panic buying of toilet paper. Currently, all we hear and think about is the impact of the COVID-19 outbreak affecting everyone in all aspects of work and life, including the real estate market. So, the question is, how has COVID-19 impacted the Singapore real estate market?

The attractiveness of Singapore real estate

The Singapore government are receiving ‘praises for the remarkable containment and handling of COVID-19’, which has been a great strength and provided faith for many Singaporeans and even foreigners. Evidently, the foreign demand in the Core Central Region (CCR) is still seen to be buoyant. In the eyes of foreigners, Singapore is standing out amongst the rest of the cities as a safer and more desirable place for real estate investments. –Ismail Gafoor, CEO of PropNex, EdgeProp

Though we are still in the early stages and despite travel bans that have been put to effect since the start of February, EdgeProp has indicated that the percentage of foreigners’ purchases of non-landed property in CCR has increased from the same period in 2019. The table below expresses that the foreign demand for CCR is still going strong.

Information by EdgeProp

Price decrease

However, with all that said, according to flash data from the Urban Redevelopment Authority (URA) as of April 1, 2020, the prices of private residential property have decreased by 1.2 per cent in the last 3 months from the last quarter of 2019. Prices of non-landed homes have also dropped, CCR fell by 1.5 per cent while those in the outside central region (OCR) dropped by 1 per cent.

Ms Christine Sun, head of research and consultancy at OrangeTee & Tie, has predicted that there will not be major price corrections in the following months despite the declining condition of COVID-19. Additionally, if prices were to show signs of an abrupt decrease, the government can potentially promote cooling measures to stimulate demand, which will allow prices to be more resilient compared to previous recessions, says Mr Wong Xian Yang, Cushman & Wakefield's senior manager for research.

Ion Orchard and The Orchard Residences: Non-landed CRR property

Investor’s perspective

Mr Ismail Gafoor, CEO of PropNex Realty, is predicting a 2 to 3 per cent drop in property prices in 2020, given the current market sentiment. Which would be the perfect time for genuine buyers to take advantage of the lower interest rates to invest in "rightly priced" and hard-to-come-by projects. In addition, as the Singapore inter-bank offered rate (SIBOR); how home loans are secured, spiralled downwards in recent weeks, as the US Federal Reserve's emergency slashed its key rate to near zero.

From an investment perspective, real estate has defensive investment characteristics, providing stable cash flow with the ability to tailor rents to manage occupancy and of course, the benefit of diversification.

Although investments in real estate have fluctuated over the years through numerous downturns, the overall trend has been for higher for real estate and, JLL Research & strategy has reported they see no reason for this trend to reverse. As real estate continues to offer good returns in comparison to other forms of investments.


Singapore’s CCR continues to attract foreigners and is holding demand, despite the situation, as the percentage of foreign buyers of non-landed CCR properties have increased from the same period last year. Overall, the data provided by the URA has indicated price decreases of private residential property by 1.2 per cent in the last 3 months from the last quarter of 2019. However, prices are not expected to have a dramatic decrease. With the current market sentiment, a price decrease of 2 to 3 per cent is a small compared to the stock markets which had suffered high double-digit losses. With global interest rates including our SIBOR, trending downwards, it may present an opportunity for property investors to enter the market.

As 2019 comes to a close, we will be taking a closer look at what's happening in Singapore’s non-landed private residential property market thus far.

Rising Property Prices

Property prices for the private residential (non-landed) market have been on the rise despite the recent round of cooling measures in 2018. The higher Additional Buyer’s Stamp Duty (ABSD) and Loan to Value (LTV) limits did not seem to deter would-be property buyers, with property prices continuing to trend upwards in 2019, rising 1.3 per cent in 2019 Q3 compared to the previous quarter.

Property analysts had attributed this to the unrest in Hong Kong as well as the rising tensions between China and the USA. The Singapore property market has seen increasing interest from Chinese buyers, looking to protect their capital and hedge against their own currency risk in Singapore.

Falling Vacancy Rates

Vacancy rates have been trending downwards, from a high of 10.4 per cent in 2016 Q2 to a low of 6.4 per cent in 2019 Q3. This corresponds to the fall in the rental index in the same period, which indicates that many property owners have relented in lowering their asking rental instead of leaving their units vacant. In 2019, the rental index picked up slightly, which could be caused by a scarcity in desirable units (due to falling vacancy rates) and an emerging trend for Singaporeans to rent instead of purchasing a private home due to changes in the LTV limits. There is no evidence that this rise in the rental index is caused by an increase in the expat population (Non-resident population grew by less than 5,000 from 2016 to 2019).

Increasing Supply

From 2020 to 2023, the private non-landed residential market is expected to receive approximately 50,000 new properties, representing a 16% increase in property stock. This can be attributed to the en-bloc frenzy in 2017-2018, when the developers bought many en-bloc sites for redevelopment. The Monetary Authority of Singapore (MAS), in its Financial Stability Review 2019, had warned that “the increase in unsold inventory could place downward pressure on prices in the medium term”. In addition, developers who fail to sell all their units within five years will be hit by ABSD. This will put more pressure on the property price.

Executive Condominiums (ECs) Grants and Income Ceiling

The increase in grants available for first time EC buyers as well as an upward revision of the income ceiling for buyers will pull away the demand for private residential properties. This will further exacerbate the supply glut in the coming years.


There are many downsides to Singapore’s non-landed residential market in the coming years. First, the supply glut may force developers to slash prices of unsold units in order to avoid the ABSD. Second, the vacancy rate may rise due to the increasing supply of units. Third, the global situation is expected to improve in the coming years which may slow the inflow of capital into Singapore.

Written by: Hong Jia Jun and Oliver Siah