Six Major Impacts on Singapore Property Market

In current times, many of us are facing uncertainties and fear brought about by the Russian- Ukraine conflict, and the on-going response to the COVID-19 pandemic. The situation has resulted in hyperinflation, rising oil prices and interest rate. And some of you have asked if the stock market will crash in 2022. Here are some of these insights on how the Singapore property market will be affected.


Do Russian Ukraine War affect Singapore property price index
How war affect Singapore Property Price Index


External events such as wars exert pressure on asset value such as stocks and shares, as well as property prices for a short period of time. It creates a window of opportunity where the market reacts, but the property market will soon recover in spite of the prevailing war. Historically, events such as the Iraq and Afghanistan war, it has shown that wars do not have direct impact on the Singapore property market. However, data has shown that the property market was more affected by 2008 GFC and 2013 cooling measures. War time seems to attract more savvy home buyers and investors, resulting in an increase in property transaction volume. Private Property Volume also surged 17% a year on average after the start of each war.

Stock market and Singapore property price index
Historical Market Crashes & Recovery with the Singapore Private Property Price Index


Many people ask if our home stock market will crash if the Stock Markets crash around the world, due to the recent Russian-Ukraine War. Historically the world event that caused a high impact was the 9-11 terrorist attack, which crashed the US stock market, causing a $1.4 trillion loss in market value. Market crashes are temporary and the Market is likely to recover and do better than previous crashes.

What does this mean? Every crash is proven a golden opportunity to multiple your wealth. The COVID-19 pandemic and the Russia-Ukraine War have both shocked the stock market, the Straits Times Index (STI) had reacted as well. While the stock market is volatile, the Singapore residential property is more resilience to market crashes than stocks.

Residential real estate is deemed as non-speculative, non-volatile and “safe haven” asset class, and the preferred choice for investors. Overall, property is a more stable asset and the preferred choice during uncertain times. The stock market has recovered some losses from the initial shock caused by the Russian-Ukraine War which started on 24 Feb 2022. Data has shown that the prices for non-landed property prices was not affected in Feb 2022.

Oil Price vs Singapore Property Price Index
Effects of Oil Price on Private Property Price Index


The effects of rising oil price will drive transportation costs up, in turn increasing the construction costs, and Home prices. Home buyers are used to the new price level and prices are unlikely to be lower drastically as compare to oil prices. Hence, drop in oil prices might not lead to a drop in property prices.

The effects of rising oil price will cause a snowball effect and result in

  • Higher transport cost
  • higher construction cost
  • higher future home prices

Homebuyers will eventually be used to the new price level and prices are unlikely to be lowered drastically as compare to oil prices in future.

Singapore PPI vs Inflation
Property Performs well in Inflationary Environments


We are currently facing hyperinflation, a near 9-year high. What does this mean? Things become more expensive over time, and Cash loses its purchasing power over time due to inflation. Is it wiser to keep cash in bank or invest cash in asset that is good hedge against inflation? Data has shown that Home price grew faster than inflation over the last 15 years. Private property price index has grown faster than consumer price index (inflation) over the last 15 years. Home price growth will continue with more inflationary pressure due to increasing costs in land, construction material, construction, labour, and transportation.

What you consider ‘high’ now is low in the future. Will you rather buy high now than buy even higher in the near future? Gone are the days of “Buy Low, Sell High”, the New Normal Is “Buy High, Sell Higher”. For all new buyers and investors, do not wait and invest today.

Bank SORA rate vs PPI
Rising Interest Rate does not affect Home Price Growth


When interest rate rises, home prices do not necessarily fall. Interest rates and price index moved in opposite direction – only 35 out of 64 times (54%) in the last 25 years, and may also be due to other factors. Currently, home prices are well supported fundamentally by positive economic growth, good job market, strong affordability of consumer, low supply and high demand, and high liquidity in market due to low bank interest rates.

When SORA rose from 2017 – 2019, home prices continued rising. SORA was still well below the previous high (3.3%). Most upgrading home buyers who previously own HDB flats are adapted to the HDB interest rate of 2.6%. In the past years with rising interest rates, property transaction volume rose in tandem. Rising interest rates do not affect buying demand as people still consider real estate as a good asset class. Investors are confident that capital gain of residential properties outgrows the borrowing cost.

Effect of Past Pandemics on Singapore Home Prices
Effect of Past Pandemics on Singapore Home Prices


The past two years has been challenging for Singapore and globally due to the COVID-19 pandemic but it has no adverse impact on home prices, showing that affluent individuals are still able to invest in property.

Year 2003-2004: Only SARS period observed dampening effects.
Year 2009- 2010: Home prices grew during Swine Flu as people were no longer worried (low death rate).
Year 2020- 2022: Home price continue its upward climb as demand grew stronger from upgraders for bigger home size during prolonged COVID-19.

Major outbreaks had a slight impact on private home transaction volume. Historically, transaction volume fell by 32% during SARS period, but the Home prices continue to grow during Swine Flu as people were no longer worried (low death rate). There was demand to upgrade to larger homes due to work from home during COVID-19. Hence the pandemic has little or no adverse impact on home prices.



It is good news for our property market and homebuyers. In 2021, the highest transacted value came from Resale Condo, followed by New Sales condo and HDB Resale. Overall totaling $1.7 billion in transaction! This shows that there are many opportunities for Singaporeans, as property performs well in inflationary environment, and consistent price growth across all residential property segments.

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