Impact of the Asian and Global Financial Crises on the Singapore Property Market (Updated)

Updated: Mar 26

One of the common questions i get from readers is whether i have studied the impact of the Asian Financial Crisis (AFC) and the Global Financial Crisis (GFC) on our Singapore Property Market and how it compares to what we are going through today.

In fact, i have and have shared my findings in March with my team before the lock down began.

While honestly, it is impossible to triangulate whether the current COVID situation would be similar to the prior economic crises, the knowledge of how markets have rebounded in the past does provide solace (whether rationally or not) for concerned property owners and investors.

Humanity always feels safer when we have something to cling on to, to reassure ourselves during distressed times.

Through the charts and analysis in this article, i hope to bring you some clarity on how the past events have panned out and my best guess on property prices moving forward.

Let's begin with the Asian Financial Crisis in 1997.


Impact of the Asian Financial Crisis on the Singapore Residential Property Market

The full brunt of the Asian Financial Crisis hit our shores in July 1997.

As you will see in the following chart, private market volumes suffered a decline the immediate months after and subsequently recovered only 9 months later.


private property market during asian financial crisis
Within 9 months of the Asian Financial Crisis, volumes recovered near to or exceeded pre-crisis levels

The impact to transactions volume for the 1st 8 months period were the least in the CCR region at -42%, followed by the RCR region at -59% and the deepest impact was in the OCR region at -64%.

This could be due to the availability of liquid assets by the affluent market to continue buying into prime properties while the masses, with their jobs in limbo and with less bullets on hand, took a more conservative stance and put off their buying decisions.

However when the buying volume returned on the 9th month, the month on month volume in the Core Central Region (CCR) bounced back by 45%, Rest of Central Region (RCR) bounced back by 94% and the Outside Core Region (OCR) recovered by a stunning 286%.

This can be attributed to the pent-up demand by mass market buyers who had greater visibility and confidence in a recovery by March 1998.


It is noteworthy to point out that prices started correcting more significantly only after 3 months from the full impact of AFC hitting our shores.

When volumes decreased, naturally supply & demand dynamics witnessed further softening of prices and the decline in prices continued until the market bottomed out in November 1998.

This bottoming out of prices took 7 months after the recovery in volume illustrated in the previous graph.

By then landed home prices had corrected by -38% and non landed private homes by -35%.


Zooming into the average per square foot (PSF) performance of each region, the bottoming out of private non-landed prices happened between Oct and Nov 1998.

By then, the OCR region had corrected by -30%, the RCR region by -45% and the CCR region by -42%.

It seemed that the Asian Financial Crisis impacted all segments of the population almost similarly.


When the green shoots of recovery started sprouting in Nov 1998, prices rebounded near to pre-crisis highs within 13-14 months of the bottoming out.