The April Record: Why are Private Home Sales Still Rising?

Hey there, Singapore. Houses! That’s right: Despite five rounds of insane cooling measures, private home sales still managed to rise in April. While the local authorities double their order of aspirin, let’s look at why it might be happening:



What Happened in April?

What happened is 2,487 new units got sold by developers. That’s a 3.9% increase from March, and the biggest record in three years. It’s also the third straight month that private home sales exceeded the 2,300 mark.

And just days before, the Ministry of National Development (MND) claimed cooling measures “are working“.

Yeah, sure they are. They’re “working” like I work after five on Fridays.

While cooling measures have caused modest price declines, the growing sales volume suggests nothing’s under control yet. Resilient demand, coupled with unrealistic investments (i.e. shoebox apartments, Sky Habitat), are propelling Singapore’s property market toward a potential crash.

Why’s it happening? I put it down to:

  • Uninformed Optimism
  • Low Interest Rates
  • Shoebox Apartments
  • HDB Prices vs. Private Home Prices



1. Uninformed Optimism

To the layperson, Singapore’s property market is the Nirvana of the investment world. It’s been spiralling upward since 2007, despite efforts at government control.

It doesn’t help when tycoons like Li Ka Shing claim that, no matter what the price, they’ll buy property in Singapore. Because of our herd instinct (yes, I’m flat out saying it, and I’m Singaporean. So Moo moo), we skip other investment options.

Insurance? Too slow.

Structured deposit? Too complicated.

Forex or stocks? Too risky.

No, the answer is property. Property will cure all our financial ills. It will ensure our future, bring social status, and cure lung cancer.



You laugh, but until educational intervention takes place, this irrational optimism will keep plaguing the property market. Mr. Charlie Sng, a successful property investor since ’93, mentions that:

“The government should run free courses at community centres. Teach people what will happen if they have to default on their loan. Show them what are the realistic returns when they buy their shoebox flat, or how the bubble has to burst.”


2. Low Interest Rates

SIBOR and SOR have stayed low for some time, and home loans are at their cheapest in years. To Singapore’s growing middle-class, this is an opportunity to move into the property market.

There is a notable disparity between HDB loans (2.6%) and the typical bank loan (little over 1%). Because newcomers to the market are unfamiliar with the terms (e.g. pre-payment penalties, lock-in clauses, collaterals), bank loans can create an illusion of affordability.



“Why get a HDB flat on a HDB loan,” some are thinking, “when we can risk getting private property on a bank loan?”

Often, this question is answered when they’re in the queue for charity porridge.

So if you happen to think this way, please do your homework. At the very least, make sure the bank loan is really as cheap as the banker claims. Visit sites like, to compare the latest interest rates from all the banks.


3. Shoebox Apartments

Oh for the love of…are people still buying these? I already have two articles about this, and the Minister for National Development (Mr. Khaw Boon Wan) has repeatedly warned against it. The MND even threatened to start taking steps.

(Hah, I’d like to see what those “steps” are. A strongly worded letter? A disapproving glance? Spitballs?)



There’s been a glut of shoebox flats lately; apartments that are 500 square feet or below. Because shoebox flats have low quantums and high rental yields, they’ve become a “get rich quick” scheme for amateur investors. These investors expect similar performance to central region shoebox flats, so they’ve been buying like aunties at an OG sale.

I’d comment on their expectations, but I’ve been told to cut back on words like “ass”.


4. HDB Prices vs. Private Home Prices

Ever since November 2011, HDB prices have been climbing at significant rates. The property market needs to invent a technical term for this, and I suggest “scary as hell“.

Thanks to a variety of reasons, such as rising median COVs, HDB flats are threatening to hit prices that were once exclusive to private housing. There have been reports of HDB flats hitting the $900,000 mark; and while a bumper crop of 8000 flats should help, it doesn’t change the fact that HDB flats aren’t as cheap as before.



To some buyers, such as Ms. Adeline Tay:

“Whether it’s private housing or HDB, it’s both quite expensive anyway. So if in either case I’m going to be paying for  30 years, I may as well just bite the bullet and get a condo. I think the price difference isn’t big enough to prefer HDB over a small condo any more.”

Image Credits:
ssedro, disrupsean, _Fidelio_,, (final Image), neajjean

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