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3 reasons why property prices in Singapore won’t decrease in 2020

The COVID-19 pandemic has affected virtually every industry in Singapore. However, despite recession, the real estate industry seems to not have been affected. Property prices in Singapore has not decreased this year, but in fact has even risen compared to the last quarter of 2019.

Many were surprised with this outcome in property prices. In a typical recession, the need to sell property usually rises – due to more people could not maintain their mortgage payments, some would prefer to downgrade to smaller houses to save money for a rainy day, etc. As such, the supply of property rises and usually would lead to a drop in property prices. However, this typical trend is not observed in this country. In this article, we will discuss the three reasons why property prices in Singapore won’t decrease in 2020.

1. Government financial assistance

The pandemic has affected many people around the globe – due to the need to stop the spread of the virus, many are required to stay at home and minimise social interactions. As a result, a lot of people cannot go to work, causing their income decreases. This would have resulted in many dropping their mortgage payments just to cover the more important necessities such as food and toiletries.

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However, this was prevented in Singapore due to government’s immediate COVID-19 relief response. The financial support has helped many Singaporeans in supporting their daily needs especially during Circuit Breaker. They can feed their families and continue paying for their bills including house mortgage. Thus, Singaporeans would not need to liquidate their properties and be forced to sell them at lower prices, which would have caused an increase in property prices due to higher supply in the market.

2. Workforce resilience

To ensure COVID-safe workplaces, the Ministry of Manpower has implemented certain measures such as making sure work-from-home the default mode of working since April 2020. Both employers and employees are encouraged to adapt to new work normal such as having virtual meetings (vs face-to-face discussions) and getting homes set up as a work environment.

| Read more: The News Bearer: Singaporeans resilient in the face of Covid-19 |

This is essential as it enables people, especially those in the non-essential service sector to keep their jobs without having to go to offices. E-commerce and online businesses have also been booming. Therefore, many locals still have jobs and sources of income. Those with mortgage payment obligations can still pay their bills, and hence, the property prices in Singapore did not dip but has increased instead.

3. Financial relief measure

The biggest contributor in the increase of Singapore housing prices is the financial relief measure. The Monetary Authority of Singapore (MAS) had announced that payments for all house mortgages can be deferred until the year 2021. This postponement has prevented a lot of Singaporeans from selling their properties and dropping their mortgage payments. Thus, the property prices are maintaining its progressive appreciation.

| See also: Home insurance: do I need it and how much do I need? |

This measure provides flexibility to house owners to choose which mortgage repayment plan exactly that they would like to defer. They can defer house mortgage repayment up to the last day of 2020. There is also no need to provide a proof of why they need the deferred mortgage repayment. Furthermore, the credit score will not be affected if they apply for the financial relief measure deferment.

Bringing it together

These are the three reasons why there was not a decrease in Singapore property prices despite the severe effects of COVID-19. As a matter of that, Singapore house prices kept rising. However, there is still a chance that the property prices may drop as the financial cooling measure will cease effectiveness at the end of 2020.

Disclaimer: The information in this article is accurate as of 18 Nov 2020 unless otherwise stated. Whilst we endeavour to keep the information accurate and updated, GoBear makes no representation or warranties for the accuracy of the information in this article or content of any websites which may be linked.

This article is for informational and promotional purposes only; it does not constitute advice or recommendation and does not take into account your own individual circumstances.

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