IN SOME 18 months in the mid-90s, remisier Allan Tay made about S$2mil in share commissions and decided to plunge into the decade-long red-hot property market.

Instead of buying one or two condominiums, he used the money as down payments for five of them.

Property was the republic’s newest money, turning many developers into millionaires and almost everyone else into speculators. Hundreds would queue up overnight to book new launches, pay the deposits and sell the option routinely for quick profits of up to S$40,000.

So in 1996, Tay joined the ranks of some 10,000 people (about 10 percent to 15 percent of them foreigners) to buy new private condos worth S$17bil. Another 9600 were transacted in the secondary market.

That bubble burst in 1997 throughout Asia, revived briefly here in 1999 and fell once more.

Tay’s investments had fallen by two-thirds. The stock market – which moved in tandem with real estate – was sharply down, so he was unable to service his 25-year property loans. He couldn’t sell them since the proceeds were not enough to clear his debts. He was recently declared a bankrupt – and his properties force-sold.

There are tens of thousands of people like him, upper-middle class professionals who became casualties of an old economy gone sour. Since 1996, horribly over-priced condos have crashed by an average of 60 percent. These are mostly businessmen or yuppies, with a family income of around S$10,000 a month.

For 10 happy years Singaporeans, mostly aged 30s and 40s, had been buying into property using Central Provident Fund savings; the smart ones cashed out. Those who didn’t watched their investments plummet. They are still servicing these 20 to 30-year loans at yesterday’s inflated prices.

One message posted in an online discussion, possibly by a Malaysian, recently said: “I am no rocket scientist but I know that housing in Singapore is not value for money.”

Many people have more than one property because mortgages are cheap and banks are lenient with loans.

“Imagine if bank rates start to rise, many people will be pushed against the wall and a blood bath may ensue,” said Ipoh Boy.

Some speculators lived a nomadic life buying and selling, dragging their families from one residence to another and picking up profits each time.

Jeffrey Ng, 35, was featured in a newspaper for having changed homes 11 times in 10 years. He would move into a new flat and sell it a few months later for profits of S$10,000 or S$20,000.

“I don’t believe in living in a property that is worth a lot of money. When someone offers a good price, sell,” said this good friend of housing agents.

For foreigners, this preoccupation with property is incomprehensible. Elsewhere a house is a home, bought to live in. Here it is an investment tool.

Jeffrey Ng is not a unique fellow. According to official statistics, close to three-fifths of households have changed homes in 10 years from 1990.

For Singapore, this property debt has become a drag on the economy that will affect the future retirement savings of an important segment of people.

Property remains politically controversial. Fresh graduates often complain about expensive private property being out of their reach and want the government to lower land costs. Property owners, on the other hand, want an “open” market that allows speculation and unrestrictive foreign buying so that demand can rise.

Demand in this period of recession remains very low. It is still far away from an upturn until the economy picks up or when prices come down sharply.

In the wake of the bubble burst, two things have happened. Firstly, banks have been persuaded to go easy on foreclosure. Some have had their property debts restructured. Most banks own property and have a stake in maintaining values.

Secondly, a price war of sorts has started with major players pricing their units lower than their rivals’ projects nearby. As a result, there has been increased nibbling by buyers.

Fearful of a sustained period of weakness in the economy and consumer confidence, developers are trying to push out their units rather than hold on to them.

Higher-income professionals – the best prospective buyers – are holding back for two reasons: they are scared of losing their jobs, and they expect prices to drop further.

Buying a high-end condo is a 30-year expensive commitment and these days people are less certain about keeping their jobs.

“In most two-income families, either spouse being retrenched could be a financial disaster,” said a housing broker.

“Until job stability returns, people are not going to push themselves to buy a property.”

Unlike most other countries, the vast majority own their homes; 85 percent have Housing and Development Board flats, which are relatively cheap. During bad times, these owners simply put aside their upgrading dream of a condo with a swimming pool and tennis court.

This poor sentiment has reduced by half the number of real estate agents, most of whom are freelancers.

Recently, some creative ones have resorted to selling property at the pasar malam (night market).

“It’s funny seeing them set up stall among the cheap T-shirts and aroma of roasting Taiwan sausages,” said a housewife.

The up-market brokers who sell expensive bungalows have taken to golf to hook potential clients.

The gloom has not touched everyone. There are die-hard believers who say that property in Singapore will resume its strength when the economy recovers.

“Look, Singapore is a small city. As long as there is stability and a sound economic regime, land will always be a finite and expensive commodity,” said an old banker.

Indonesia’s return to its normal growth is a crucial factor.

Singapore plans to remake itself into a business hub, a global and technological city, attracting talent from all over the world.

This will change its architecture, too. In future, private condos – like subsidised public flats – will become higher and smaller.

Developers expect studio apartments to become highly popular as yuppies choose a single or childless life. Besides, the city will need another 800,000 residential units to accommodate a projected population of 5.5 million (now 4.1 million) by 2040.

Seah Chiang Nee is a veteran journalist and editor of the information website littlespeck.com

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