The Singapore property index registered a decline of 14.1 % in the first quarter of 2009. This is the most drastic quarterly decline to date. Private home prices have dipped for the 3rd consecutive quarter. That brings the total tally of 21.2% decline.

According to URA statistics, we’re back to where we were in Q1 2007.

What this means is that properties purchased between Q1 of 2007 to Q2 of 2008 are in the red zone of valuation lower than purchase price.

Purchase incentives such as deferred payment schemes are now coming back to haunt buyers. Those that have yet to confirm a loan, may have to limit the loan to purchase price ratio. Those that are going for the maximum loan amount, will be required to cough up the amount of purchase price not supported by valuation in cash. We have not yet seen many distressed cases flowing into the secondary market, as some of these distressed owners may try to push a sub-sale to recoup losses.