Shocks to property sector usually stretch beyond the recessions: IREUS

AN analysis of historical data has shown that real estate downturns in Singapore associated with recessions tend to last longer than the periods of economic decline, according to the Institute of Real Estate and Urban Studies (IREUS) at the National University of Singapore.

Recessions are typically connected with significant declines in home prices, as any contraction would reduce households’ disposable incomes and their ability to purchase homes.

And interestingly, Singapore’s real estate downturns tend to be longer than the recessions. The first 2 recessions - in 1985 and 1997/1998 - lasted 3 to 4 quarters, but home prices remained depressed over 9 to 10 quarters. The third recession in 2001 lasted 3 quarters, but the decline in home prices persisted for 15 quarters.