Introduction
With Trump’s renewed push on tariffs and looming signs of a potential recession in Singapore, 2025 is shaping up to be a year marked by heightened uncertainty and instability.
Throughout several of our client consultations, we’ve noticed a recurring sentiment:
“Hey guys, what do you think? We are thinking of putting our plans of buying an investment property on hold, not sure if we will be entering a recession this year.”
“Is it wise to buy now, will property prices fall and not recover in the near future ?”
These concerns are valid. After all, no one wants to make a major financial move at the wrong time. But it also led us to ask a deeper question:
Is this “fight or flight” response the best move, or could we be missing out on a larger opportunity?
In true Decoupling Expertise fashion, rather than reacting to fear, emotions, or sales-driven persuasion. The right path forward is to evaluate the situation via facts, data, and sheer logic.
We are Decoupling Expertise
Before committing the next 5 minutes to read this article, it helps to know who is behind the pen.
We are a team of specialist realtors that specialise in helping our readers research, shortlist, and purchase investment properties.
Our core expertise revolves around helping SG property owners purchase 2nd investment properties without ABSD. Decoupling is often the go-to strategy that we utilise to help our readers minimise ABSD, hence the name Decoupling Expertise.
Our articles serve as documentation and testimony of our client engagement. If you fancy having solutions tailored to your challenges, drop us a text.
Objective
In this article, we will address the following
- Will property prices dip and fail to recover after a recession?
- What are the real risks of entering the property market during an economic downturn?
- Could the perceived risk shape up as an opportunity for investors?
Will property prices fall during a recession and not recover?
Your greatest fear is buying into a property now, seeing its price fall during a recession and not seeing profit in many years.
These are also the common advice that your “well intent” relatives and colleagues will often prescribe. But do not let this common man’s wisdom mislead you; instead, let’s look at what historical data has to say.
Rate of property price recovery after a crisis
Source : Edgeprop research
Singapore Property Price Index – Crisis & Recovery Summary
| Crisis/Event | Price Decline During Crisis | Price Increase Post-Crisis | Recovery Period |
| Asian Financial Crisis (1997–1999) | ↓ 40% | ↑ 60% | 1999–2000 (1.5 years) |
| 9/11 + SARS (2000–2004) | ↓ 20% | ↑ 58% | 2004–2008 (4 years) |
| Global Financial Crisis (2008–2009) | ↓ 25% | ↑ 62% | Recovery to previous high – 2009Q1 to 2010Q1 (1 year)Recovery to all time high – 2009Q1 to 2012Q1 (3 year) |
| COVID-19 (2020) | ↓ ~2.2% | ↑ ~34% | Recovery to previous high – 2019 to 2021 (2 years)Recovery to all-time high – 2019 to 2023 (4 years) |
Three key insights stand out:
1. Recovery Has Always Surpassed the Dip
Every major crisis led to a temporary price correction. But in each case, property prices not only recovered, they went on to exceed previous highs significantly.
2. Recovery Happens Faster Than Most Expect
Historically, it took no more than 2 years to return to pre-crisis price levels and no more than 4 years to set new all-time highs. This meant that if you purchase a property during the recession, you are looking at roughly 2 years to break even and 4 years tops to see a profit.
3. Price declines are becoming milder with every recession
With every recession, Singapore property prices are displaying increasing resilience, with the recent COVID-19 pandemic only triggering a -2.2% decline in prices.
Singapore real estate is a hard asset that is continually hardening
With the pointers above being established, let’s dive deeper to examine the fundamental factors contributing to Singapore’s real estate price resilience in the following sections.
Fundamental #1 — Majority of Property Held for Homestay
Ask yourself. During times of economic hardship, how many times have you come across a friend or acquaintance that have to sell their house and render their family homeless just to get things afloat?
Unlike markets driven heavily by speculative investors, the vast majority of private property owners in Singapore are genuine homeowners.
This homestay demand creates a stickier price floor where owners are less likely to fire-sell even during downturns, helping to cushion market volatility.
Over the past decade, due to the introduction of ABSD. Owner-occupation rates have risen from 87.2% in 2010 to 90.8% in 2024.
This shift shows that Singapore’s residential property market is becoming fundamentally anchored by true homeowners and shielded from speculative risk.
Owner-Occupied vs. Non-Owner-Occupied Properties in Singapore
| Year | Owner-Occupied (%) | Non-Owner-Occupied (%) | Source |
| 2010 | 87.20% | 12.80% | Census of Population 2010 |
| 2024 | 90.80% | 9.20% | Households – Latest Data |
Fundamental #2 — Government-Controlled Leverage
Here’s the thing about volatile property markets: they are often accompanied by overleveraging.
This is where Singapore fundamentally differs from many overseas markets. The Singapore government has taken specific and deliberate measures to manage household leverage, ensuring that borrowing remains sustainable across all market cycles.
This is effected through several rounds of property cooling measures, specifically using Loan to value ratio (LTV) and Total Debt Servicing Ratio (TDSR) to put guardrails on the amount of mortgage that an average Singaporean household can put on their balance sheet.
The result is clear in today’s data, where household debt-to-personal disposable income stands at a low of 1.1 in Q3 2024 compared to a 15-year historical average of 1.4.
MAS – Singapore household debt to personal disposable income
Source: Straits Times MAS Statistics
Fundamental #3 — Lowest Foreign Investor Participation
With strict foreign ownership policies and most notably, the imposition of a 60% Additional Buyer’s Stamp Duty (ABSD) on foreign buyers in 2023.
The Singapore real estate market is largely shielded from speculative foreign capital flows.
The impact of this policy can be clearly seen. Based on URA transaction figures from May 2023 to April 2024, following the latest ABSD hike:
Foreign purchases of private condominiums dropped sharply from 1,064 units (in the previous year) to just 306 units.
This represents a dramatic over 70% decline in foreign buying activity within a single year.
With a lower proportion of foreign investors, Singapore’s real estate prices are driven primarily by domestic demand fundamentals. This reduces exposure to sudden capital flight, global currency swings, or geopolitical tensions that often destabilize other major property markets.
Decrease in condo sales to foreigners after the 2023 ABSD hike
Source : Straits Times URA Statistics
Fundamental #4 — Government-Controlled GLS Land Sale Pricing
Land supply in Singapore is tightly regulated through the Government Land Sales (GLS) programme. By controlling both the quantity and pricing of land releases, the government acts as a stabilizing force, preventing drastic dips in land prices.
Even during periods of economic recession, you will never see the government allowing for a plot of land to be sold at below market value. This creates an engineered hedge for the Singapore real estate market against any external economic instability.
Data : URA Land Sales Statistics
Fundamental #5 — Demand and Supply Dynamics
Established earlier in point #1, demand is predominantly attributed to local homestay buyers purchasing for homestay needs.
This marks a demand source that is growing and inelastic.
On the supply side for private condos, we do not see signs of overcapacity for both resale and new launch condos.
New launch condo unsold inventory at its lowest in Q1 2025
Referring to the table tracking no of unsold new launch units over time. We see unsold inventory at a lower level in Q1 2025.
Unsold private residential units
Resale private residential unit shows signs of scarcity in supply
If you look specifically at 3-bedroom and larger units within property portals, you will notice scarcity in listings.
This is attributed to the following factors
- Strong demand and take-up rate from HDB upgraders
- Higher cost replacement for existing property owners, resulting in a reluctance to sell their existing unit
- Lack of urgency to sell, as most units are purchased for family dwelling needs
So what’s the real risk of entering the real estate market amid a recession?
Given that we have established that Singapore’s property prices are resilient and price decline is not the key risk of concern.
From our experience, the real risk of investing in a property during an economic recession does not necessarily lie in macro factors. But predominantly falls within personal factors that are subject to individual circumstances vs the environment.
1. The strength of your financial situation
This can play out as a double-edged sword. Given that you are in a strong financial position, a recession could actually turn out to be a good buying opportunity.
On the flip side, entering the market when your financial position is not well sorted out could imply weak holding power and forced liquidation.
To examine the strength of your financial position, you should look into the following area.
Your job stability
Consider your personal job stability versus others during a recession. If you operate in a niche industry or are working in a position that your company cannot do without.
Then the recession becomes a good buying opportunity for you. You should be scanning property portals for sellers who are forced to sell due to fear or financial challenges.
Cash pile
Aside from job stability, you should be assessing the size of your cash reserve. If you have at least 8 to 12 months of living expenses set aside. You could be in a good position to procure an investment property at a good price and still tideyou through any unexpected hiccups.
Outstanding loan
Most people are fearful of upgrading or purchasing another property during the recession when they are currently shouldering a hefty outstanding loan.
If you have been actively paying down your loan during the good times, or even better, If you have fully paid up your loan.
Again, the recession would turn out to be an opportune time to upgrade your current property or decouple and purchase a second property.
2. Your ability to select the right property that will hold its value
While a recession with negative buyer sentiment can present buying opportunities. A lack of competency in selecting the right investment property could still put you at risk.
The goal is to invest in property that has a captive base of buyer, properties that will rebound the fastest during economic recovery.
And importantly, avoid those that have got attributes that will pose an objection from future buyers.
Attributes to avoid when selecting a property during a recession
Let’s start by laying out factors you should avoid when selecting an investment property during an economic recession.
- Ageing development – buyer tends to stay away from development with a lease life closing in on 30 years.
- Boutique development – lesser number of units meant lower transactional volume to prop up your unit price during economic recovery.
- Bad layout – the majority of buyers are purchasing for ownstay, inefficient layout, the compromises liveability will be depriortise by future buyers.
Attributes you should prioritise when selecting properties during a recession
- 1km radius of a reputable primary school – Parents will cut down on restaurant meals and shopping expenses but they will not scrimp on their child.
- Unit type to location fit – avoid buying 1-bedders in OCR targeting families as exit buyers. Avoid buying 3 bedders in CCR targeting investors.
- Optimise for homestay buyers – as much as your budget permits, strive to get a bigger unit targeting homestay buyers.
Conclusion
Honestly, the risk of buying a property during a recession does not come from systemic risk of property price decline.
History has shown that Singapore property prices have remained resilient throughout multiple economic crises.
In fact, the real risk comes from personal factors like your personal finances and your ability to pick the right investment property. If done right, buying when everyone is fearful can turn out to be the most lucrative investment opportunity.
How to own 2 properties in Singapore? – Next Steps
Having committed the last 10 mins to reading, let’s take the next steps.
Drop us a text to share what’s on your mind and gather some 2nd opinions and ideals on whether your plan is the best way to purchase the 2nd property without ABSD.
