Despite a looming supply of new homes and government curbs on demand, Singaporeans' love affair with property continues.
Make that Singaporeans and foreigners, who are also significant buyers of Singapore homes.
It is easy to see why local real estate is hot. While there has been a huge upheaval in the global investment climate since the 2008 US sub-prime mortgage crisis, investing in bricks and mortar in this little oasis of an island has remained profitable and safe.
Many rounds of government cooling measures to curb demand has had limited impact, except for the luxury home segment.
There are many reasons for this state of affairs. An oft-heard refrain is 'scarcity of land as Singapore is a small country'.
While this is true in the long run, scarcity has not prevented a fall in property prices from time to time. Real estate investment is not immune to the boom-bust cycle, as seasoned property investors who have gone through the lean years from 1997 to 2005 can attest.
The fixation on property investments instead stems from three prevailing circumstances.
Low interest rates
The low interest rate environment has been damaging to savers. With saving rates running as low as 0.1 per cent a year against inflation of about 5 per cent, the erosion in the value of money kept in a bank has been particularly severe. Simply put, for every $1 in interest you earn, buying power falls by $50.
When interest rates are this low, there are just three reasons for keeping cash: to fund daily expenses and short-term spending; as a buttress for a rainy day; or to build up a war chest if you believe a downturn is coming and you are hoping to pick up assets on the cheap.
On the other side of the equation, low interest rates are a boon to borrowers. For consumers, the lowest lending rates can be found in the home loan market, with rates typically well below 2 per cent. So it makes sense to invest in residential property, which can yield 3-4 per cent in rentals. Also, real estate investment is an effective hedge against inflation.
Compared to other forms of investment like unit trust and shares, investing in property is less volatile.
As long as you are financially prudent, your investment is safe. In Singapore, properties do not become worthless overnight.
This is an important consideration for conservative investors. The losses suffered by investors of minibonds and High Notes linked to bankrupted US investment bank Lehman Brothers have given structured notes a bad reputation.
The financial shenanigans at some China-based, Singapore-listed firms like China Gaoxian, Sino Techfibre, China Printing & Dyeing Holding and China Hongxing have hurt the image of stock investing among ordinary investors.
The disclosure-based principle behind stock investing has led to situations that are akin to shutting the barn door long after the horses have bolted.
In contrast, the Singapore housing market is more tightly regulated, which results in better protection for buyers. Strict rules on project accounts have ensured that there has never been a case of a developer leaving buyers in the lurch with uncompleted homes.
Nothing attracts investors more than a winning streak.
Boom-bust cycle notwithstanding, it is human nature to look at the immediate past and project the trend into the future.
Local home prices remain at a record high. They have been on an uptrend since 2005, save for a brief period between the second quarters of 2008 and 2009.
The economy may be slowing, but there is full employment. Meanwhile, the world is awash with hot money as a result of a huge injection of liquidity by the central banks of the US, Europe and Japan.
Some of it has come to our shores, which may explain why the Government introduced an additional buyer's stamp duty of 10 per cent last December on home purchase by foreigners.
So, property remains a solid bet in the near future.
But past performance is no guarantee of future showing. One need only look at the West where a whole generation of Americans and some Europeans have been deeply scarred by their housing busts. Today, many no longer see property as a viable long-term investment and prefer to rent than buy a home.
Those with longer memories may also recall that it took 14 years for the Urban Redevelopment Index - which measures home prices - to surpass the last market's peak in 1996.
Unlike stocks and shares, property investment is more cumbersome. There are additional taxes and recurring fees to pay plus the hassle of tenants.
It is a matter of time before interest rates will rise from today's low levels. Price discovery is less transparent than the stock market. In a downturn, a home owner may not be able to find a tenant or buyer.
These are relevant factors to consider.
Property investment may indeed be described as a love affair. But to enjoy the payoff, one needs to be in it for the long haul.