Will our property market be killed by COVID-19?

It is really easy to feel the world is falling apart when you flip the papers, and browse through your social media feed daily. Almost 24/7, we are bombarded by news (real and fake ones alike) about this mysterious virus that seems to be crippling economies and social systems, and spreading fast across the entire world. Rumours are flying all over, stocks are down, people are paranoid (of each other), stock piling on daily necessity while holding back on other retail purchases and investments. And in the property field, show flats are closing, launches postponed and sellers and buyers are cancelling viewing etc…

BUT WAIT... doesn’t this sound oh so familiar. Every time something major happens, it’s almost a knee jerk reaction and the market will responded in this predictable manner – the Lehman Brothers Crisis, the H1N1, and not forgetting SARS in 2003.

Over the past few days, I was glad to finally read a few optimistic outlook published on The Business Times (see below), which took a look at the impact on the property market from various sectors. While short term ‘nervousness’ are expected, the property market in Singapore today are much more resilient and should ride this through and should pick up around second half of the year.

Lessons We Learn From SARS

A good way to calm property investors during this period of uncertainty is to look back from our past learnings during SARS which was in an even more challenging era – following the dot.com burst.

Looking the Singapore Property Price Index over the SARS period (2003 -2005), we noticed that the property market did not dip or crash but instead maintain a resilient trend holding prices till after the crisis where it started to shoot up. In property, we call this “pend up demand” over the period and this is when prices will start to shoot up fast.

So if you are a property investor, do you want to enter the market as it is bottoming out (now) or when everybody starts to re-enter the market?
DID YOU KNOW? Everyone who bought during SARS made a KILLING. (You can reach out to me, I will be happy to share some examples of projects whose value gone up after the SARS making investor who own into them much profit)d

Let’s take another look at the S&P 500 index during the SARS crisis. We notice that the SARS did not impact the market over a long period of time as the market recovered very quickly after more was uncovered about the mysteriously virus.

LAST WORDS...

So what I want to say is, it is perfectly ok to practise extra precaution during times like this. Watch your hygiene and be careful in crowded area. But we know from experience that this crisis will pass and things to return to normal. The market will return and people will be buying and selling.

Life has to go on. So having the right perspective now will determine how you will come out of this challenge.

Stay healthy!

DID YOU KNOW? Over the past 10 years, 4 bigger viruses than COVID-19 had hit our property market!
They are : LTV, SSD, ABSD, TDSR

WHENEVER THERE IS UNCERTAINTY, THERE IS OPPORTUNITY