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  • Writer's pictureAaron Lin

Ask Aaron Now: Is An Economic Crisis Going To Affect Singapore Property Market?


Private property new launches are unlikely to be significantly affected by the economic crisis because demand and supply conditions are well-controlled by developers and the government.

The private property resale market may experience slight dips in an economic crisis because sellers are more likely to downgrade their selling prices.

HDB resale market may also experience dips in an economic crisis since the demand for HDB resale is slowing with few households switching from one HDB flat to another.


Singapore’s economy is going through a difficult time, with retrenchment becoming commonplace. How will this affect the property market?

In Singapore, property agents categorise property into three different groups: Private property new launches, Resale private property and Resale HDB. Private property new launch prices are dictated by en bloc prices and government land sales. After developers purchase land at the government land sale, they incur construction fees and other expenses, which means it is possible to calculate the break-even price.

While new launch pricing may be higher than resale property pricing, the difference in age explains the pricing difference. While property new launches may not sell as fast, developers have five years to sell slowly at current pricing. Even if there is an economic meltdown where developers are unable to sell their units as quickly, there will be lesser plots of land released by the government. The government controls the supply of land and hence the projects in the market. When developers are unable to sell their units, they naturally will not bid in the next land tender. Hence, demand and supply in the new launch private property market are relatively well-controlled even in an economic crisis.

The private property resale market is relatively trickier. Prices in the resale markets are controlled by the public. In an economic meltdown where sellers may face their own economic challenges, sellers are more likely to downgrade the price they sell at. On the other hand, the new launch market is well cushioned by developers and regulators. However, there are many rules controlling loans that cushion the financial impact an economic crisis has on Singaporeans. While there are fewer Singaporeans buying property for investment purposes in an economic crisis, Singaporeans still buy for ownstay purposes. In fact, units with tenancy are less likely to sell than vacant units because more Singaporeans want to buy for ownstay purpose.

HDB resale markets do not do as well in economic crises. Demand for HDB resale markets is slowing. Most people selling HDB are those who purchased BTO flats or those who want to upgrade to a condominium. Very few households upgrade or downgrade from one HDB flat to another. In this sense, HDB resale prices are unlikely to increase in the next few years. Still, the HDB resale price index is cushioned by BTO MOP reaching five years which fetch higher prices.

An economic crisis is not going to significantly affect the private property new launch market but will affect the private property and HDB resale markets to a small extent.

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