Singapore's property market has entered a standoff between bargain-seeking buyers and developers sticking to their pricing guns, with March's new home sales dropping 83 percent from a year earlier.
"Buyers think they can have their cake and eat it," said Alan Cheong, senior director for Singapore at Savills Research. "They are expecting the other side to lose money on their behalf. That idea doesn't work if you have an economy that's fully functioning," he said, citing the city-state's unemployment rate of only around 1.8 percent.
Property prices and sales in the city-state, a key regional financial center, are closely watched for cues on whether the government can safely guide the market to a soft landing amid expectations interest rates will rise.
Some of Singapore's borrowers, many of whom already have high debt loads, may become stretched if interest rates rise and there are concerns they could dump their properties into an already slowing market if their payments rise.