How the Coronavirus May Impact Properties – Lessons from SARS

by Aktive Learning on February 18, 2020

By Property Soul (guest contributor)

This Year of the Rat is not just another Lunar New Year. Everyone received far more updates on the coronavirus than auspicious greetings. Instead of last-minute shopping for Chinese New Year goodies, there was a frantic search for surgical masks and hand sanitizers, especially after the Ministry of Health assured the public that there is sufficient stock of masks to go around (and all of them are going, going, gone).

How deadly is coronavirus?

SARS happened between November 2002 and July 2003, with 8,098 cases and a death toll of 774 in seventeen countries. In Singapore, 238 people were infected and 33 died.

It is still early to tell the severity of the new round of epidemic outbreak. Given the two-week incubation period, the number of cases and deaths could rise in the coming weeks.

According to the Singapore Tourism Board, 3.4 million visitors from mainland China came to Singapore in 2018, making it the top country for inbound visitors. In 1st quarter 2019, Chinese tourists were our biggest spenders. Nearly a million Chinese visitors spent over $1 billion (excluding sightseeing, entertainment and gaming) here, with half of the amount spent on shopping.

Without their patronage, how will that affect the business of our airlines, hotels, retail and casinos? With poor quarterly results, how can companies continue to take up so much office space and employ so many staff? With the threat of retrenchment, who dares to upgrade their homes when they may not be able to service their existing loan?

A deadly disease can trigger the domino effect in many industries: The travel industry catches the flu first, before spreading it to hotels, F&B, retail and manufacturing. In real estate, it hit the hotels first, followed by the retail, office, industrial and residential property sectors.

Industries that catch the flu

As the saying goes, pray for the best and prepare for the worst. Let’s go back in time to review what happened during SARS in 2003 to get some hints on what may happen with coronavirus in 2020.

The first SARS case in Singapore was reported on March 1, 2003. For the month of March, visitor arrivals fell by 15 percent. By April 13, the number plunged 61 percent.

For the following few months, the Singapore government advised the public to stay home. Travelers coming back home were required to self-quarantine. Hotel rooms and tourist places were almost empty. Shopping malls and restaurants were dead quiet.

Relief measures from the government came to the rescue. On April 17, the government announced a comprehensive S$230 million relief package to help counter the economic impact of the SARS outbreak. To help the travel industry, there was 30 percent rebate on aircraft landing fees and a 50 percent reduction in port dues for cruise ships. A bridging loan program was introduced for tourism-related SMEs.

1. The hotel sector

Hotels were hard hit by high vacancy rates. To avoid mass layoff of unskilled labor in hotels, the foreign worker levy was halved and training grants were increased. On April 24, there were additional relief measures for about 100 gazetted tourist hotels. They were given a rebate of $2,000 plus 30 percent of the property tax payable with effect from May.

InterContinental’s Asia Pacific revenue was down 27 percent year-on-year in 2003. For this round, the financial loss of individual hotels will depend on their percentage of business and their number of rooms in China and coronavirus-affected countries.

2. The office sector

SARS came at a bad time when the office market was underperforming. Already hammered by oversupply of office space, office rents plunged to a 14-year low in the 1st quarter. According to JLL, prime office rents dropped 21 percent. Monthly rentals of offices in Raffles Place were down 20.7 percent to $5.45 psf.

3. The retail sector

By mid-April 2003, retail sales declined 10 to 50 percent. Restaurant owners saw their revenue being halved. On April 24, the government announced property tax rebate packages for owners of commercial properties, including shops, F&B outlets, childcare centres, cinemas and theme parks.

This time, the coronavirus relief package will depend on the virus’ severity and impact on the Singapore economy.

What happened to the residential property market during SARS?

Before SARS broke out, the Singapore economy had already been affected by the dotcom bubble, US recession and the Iraq War. The Private residential property price index fell 37 percent from the peak of 129.7 in 2nd quarter 1996 to 81.6 in 1st quarter 2003. On March 1, 2003, the government finally suspended the seller’s stamp duty on residential properties imposed since 1996.

With an increase in retrenchment, the unemployment rate in Singapore jumped to 4.8 percent in 3rd quarter 2003 from 3.6 percent before SARS outbreak. The jobless rate was at record level. Bankruptcy was also at the highest level since the Asian Financial Crisis in 1999. The number of bankruptcies climbed 23 percent in the first seven months and increased 26 percent from a year earlier. By September 2003, individual bankruptcies had risen 44 percent from a year ago.

In 1st quarter 2003, the number of mortgagee sales rose to a record of 488, an increase of 19 percent from the previous quarter. Many people were downgrading from private properties to HDB flats. Prices of private homes slipped to their lowest since 1999.

On the other hand, cash-rich buyers were able to bag some good deals in 2003:

1) In July, OCBC Bank sold 11 of the 27 mortgagee units at Robin Regalia, a freehold condo at Robin Road, at 30 percent discount with average selling price of $700 psf.

2) One of the twelve freehold detached houses at The Glencaird Residences was sold for $8 million. The buyer bought the 15,000 sq ft Good Class Bungalow at District 10 for $526 psf only.

3) In August, Cluny Court changed hands at $15.5 million or $354 psf through mortgagee sale. It was a 22.5 percent discount from the asking price of $20 million. The freehold commercial and residential building at Bukit Timah Road had a price tag of $51 million back in 1997.

What happened to the industry stakeholders?

To launch or not to launch, that is the question.

Developers faced the dilemma of holding back projects or proceeding to launch during the SARS crisis. If they launched, the new units had to be priced to sell. If they didn’t launch, there would be no revenue for the coming quarter. But low margins were still better than no sales. Some developers decided to slash prices for new projects and to offload units on hand.

Below is the list of new projects launched between April and June 2003:

1) The Pier@Robertson by CDL;
2) Gardenvista by Far East ;
3) East Shine by Fragrance Properties;
4) Stevens Loft by Singapore Land; and
5) Icon by Far East.

Only 506 new units were launched by developers in 1sst quarter 2003. By the end of the year, a total of 5,216 new units were launched, a 45 percent decline from 9,507 units in the previous year in 2002. With over 30 new projects to launch in 2020, guess what will be the decision of developers?

Facing uncertainties on their current jobs, more people joined the real estate industry as a full-time or part-time property agent.

Other property-related businesses affected by the market downturn included banks’ housing loan departments, conveyancing lawyers and renovation contractors. Smaller contractors were asked by the insurance companies to pay a hefty sum as guarantees for developers. By May 2003, the construction industry shrunk by 12 percent.

What can 2003 tell us about 2020?

It is a dilemma for the property market: We don’t want to see a free fall of home prices in 2020. But if that doesn’t happen, it won’t trigger any relaxation of cooling measures imposed by the government over the past few years. Taking the hint from 2003, the relief package is likely to include property tax rebates and a waiving of seller’s stamp duty.

Is it a good time to buy properties during a crisis? Yes and no.

You may be excited by the idea if you are a value investor like me. Back then, Pier@Robertson was launched at a bargain price of $900 psf in May 2003. Now a unit at the freehold condo is valued at $2,000 psf. The following month Far East sold Icon at $700 psf. Prices of the Tanjong Pagar condo are now at $1,700 psf.

But the real good deals were in the resale market. There were many fire sales and prices were very negotiable. Between March and June 2003, I went for thirty-seven flat viewings and bought a bank sale unit by the end of June. I picked it up at $300 psf and sold it seven years later at $670 psf.

Personally, I felt safe going for flat viewings during the SARS period because I was the only buyer there most of the time. The doors and windows were opened. The only person I was exposed to was the property agent. The risk was low since the agents didn’t get much business at that time.

However, recovery of the property market takes time. It can’t immediately spring back to its previous height after a major correction. Every time when a country survives a recession, it takes some time for the economy to get back on track before the bottom-out of property prices.

Even if you have the financial means to enter the market during the bad times, you must be prepared to wait out the storm. Don’t be surprised by a prolonged slump in home prices that shows no sign of abating. It may take a year or two, or the bad days may linger for years. When SARS was cleared, the private home market continued to be weak. It didn’t really pick up until the second half of 2006.

It is critical to have holding power. Make sure the rent of your investment property can well cover the mortgage and expenses. If you buy the wrong thing, it is difficult to sell. Flat viewing, let alone buying, is the last thing on people’s mind in a crisis.

The length and depth for the spread of coronavirus will determine its impact on the Singapore economy and the property market. The longer it lasts, the poorer our economy, the higher the unemployment rate, and the softer the property market.

Recovery will depend on how strong the fundamentals of Singapore’s economy and the real estate market. Are they already slowing down before the arrival of the black swan? Is there already a big supply and demand imbalance in the market before the onset of the epidemic? If the answers are yes, the recovery curve is likely to be a U-shape than a V-shape. And the size of the U-shape will be anyone’s guess.
By guest contributor Property Soul, a successful property investor, blogger, and author of the No B.S. Guide to Property Investment. Posted courtesy of, a Singapore property blog dedicated to helping you understand the real estate market and make better decisions. Click here to get your free Property Beginner’s and Buyer’s Guide. 

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Life in the West – A Comparison of Bukit Batok Condos

by Aktive Learning on December 5, 2019

By KK Tong (guest contributor)

Bukit Batok is a matured estate in the Western part of Singapore. A relatively small estate compared to other estates, it has a population of 144,410. The estate offers predominantly public housing, with some pockets of private landed housing, one located at Eng Kong/Toh Tuck, which is at the extreme South-East, and another at the area adjacent to ITE College West (Choa Chu Kang), known as Pavilion Park. A cluster of condos is also situated in the Hillview area.

Our comparison today will be on condos in the main section of Bukit Batok, which is to the West of this estate.As with any matured town, Bukit Batok is pretty well developed and amenities are easily accessible. For transportation, the western part is served by the North-South Line while the eastern area is served by the Downtown Line.

Amenities in Bukit Batok

Amenities are plentiful, so residents’ needs and requirements are readily met. Shops, eateries, supermarkets, schools, recreational services, medical establishments are well spread out.

Some primary schools located here are Bukit View Primary School, Keming Primary School,Lian Hua Primary School, and Princess Elizabeth Primary School. Secondary schools include Bukit Batok, Bukit View, Hillgrove, and Swiss Cottage. Other institutes of learning include Millennia Institute and Dulwich College (Singapore). The nearest polytechnic is Ngee Ann, just across the Toh Tuck area.

For recreation, the Bukit Batok Swimming Complex is located near East Avenue 6. The Bukit Gombak Stadium and Sports Hall are situated near the Gombak MRT Station. Greenery is lush in this town, and nature lovers will surely enjoy Bukit Batok Nature Park, Bukit Batok Town Park, and Little Guilin.

Bukit Batok Public Library is housed on the third level of West Mall, a shopping centre near the town centre.

At West Mall, shoppers can enjoy retail therapy and food enthusiasts will certainly find lots of food options to satisfy their palates. Grocery shopping is easily done at Cold Storage at the Basement Level.

Comprehensive medical facilities can befound at Ng Teng Fong General Hospital.

MRT stations serving the residents here are Bukit Batok, Bukit Gombak, and Hillview. The two major roads to access other parts of the island is the PIE (Pan Island Expressway) and Bukit Batok Road.

Comparing Condos

For buyers who are considering making this place their home, let’s look at some condos to consider – Guilin View, The Jade, The Madeira, Parkview Apartments, and Regent Heights.

Condo #1 –Guilin View

Our first condo, Guilin View, was completed in 2000 by City Development Ltd.

Figure 1: Guilin View

Condo #2 –The Jade

The Jade, a Sim Lian Pte Ltd project, was completed in 2004.

Figure 2: The Jade

Condo #3 – The Madeira

Our third development, The Madeira, is a development of Janiton Pte Ltd and was completed in 2003.

Figure 3: The Madeira

Condo #4 – Parkview Apartments

Parkview Apartments is located on Bukit Batok St 25. This development was completed in 1998 by Far East Organisation.

Figure 4: Parkview Apartments

Condo #5 – Regent Heights

Another development by Far East Organisation, Regent Heights was completed in 1999.

Figure 5: Regent Heights

Comparing the 5 condos

Figure 6: Location Map of Condos

The 5 condos are located within an estimated 2 km range from each other. Distance to MRT stations vary for the developments.

Of the condos, the most convenient is The Jade as it is located closest to both the MRT station and the shopping centre West Mall.

Parkview Apartments is the least convenient as the nearest MRT station is 1.44 km away, a distance that is too far to walk in our hot weather.

In terms of age, Parkview Apartments is also the oldest development with a 99-year lease starting from 1994. The Jade is the ‘newest’ development as its lease starts from 2001. All the 5 condos have 99-year leases.

Other than Guilin View’s smaller sized 2-bedroom units, the other 4 developments have pretty decent unit sizes.

So which one would I choose?

I’d probably not consider Parkview Apartments and Regent Heights simply because these two projects are a good distance from the nearest MRT stations, and I do not enjoy walking in our perpetually hot weather.

The other project which I am not too keen on is Guilin View as its unit size is a tad smaller than the others.

That leaves me with two options – The Jade or The Madeira. Both these are about the same age, the unit sizes are pretty similar, and distance to the MRT is walkable.

The Jade is pretty attractive as its location is definitely more convenient than The Madeira, but its average PSF price is higher by $120. Based on the respective PSF prices, a 1012 sf unit at The Jade will set me back by slightly more than $1m, whilst a 1055 sf unit at The Madeira will cost me about $920,000. As the differential is not too big, I’d probably opt for The Jade for its convenience.

Posted courtesy of, a Singapore property blog dedicated to helping you understand the real estate market and make better decisions. Click here to get your free Property Beginner’s and Buyer’s Guide.

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