The three-month compounded SORA fell to 1.18% last week, its lowest level since September 2023. Mortgage holders with floating-rate packages are already seeing monthly payment reductions. But property analysts say the benchmark needs to breach 0.9% before buyer behaviour materially shifts — and that could take another 12-18 months.

The Math Behind the Threshold

At 1.18% SORA, a $1.5 million mortgage over 25 years costs approximately $5,890 monthly (assuming a 0.75% bank spread for a total rate of 1.93%). At 0.9% SORA (total 1.65%), that payment drops to $5,540 — a savings of $350 monthly or $4,200 annually.

While meaningful, this reduction doesn't fundamentally change affordability calculations for buyers stretching into higher price brackets. The psychological break point, according to mortgage consultants, sits around total rates below 1.5% — requiring SORA at or below 0.75%. The Federal Reserve would need to execute another 100-150 basis points of cuts to reach that level.

What Sellers Are Doing Now

Resale transaction volumes in February and March suggest sellers have adjusted expectations. Listings above $2 million saw average time-on-market of 87 days, down from 112 days in Q4 2025. Price cuts of 3-5% from initial asking have become standard for properties in the $1.5-2.5 million bracket.

The rate decline has compressed the gap between seller expectations and buyer budgets. But it hasn't closed it. Sellers who paid peak 2022-2023 prices resist accepting losses, while buyers calculate monthly payments based on current rates — rates that could rise again.

  • Current 3M SORA: 1.18%
  • Typical Bank Spread: 0.70-0.85%
  • Effective Mortgage Rate: 1.88-2.03%
  • Target Threshold for Market Shift: SORA at 0.9% (total rate ~1.65%)
  • Average Resale Time (>$2M): 87 days (down from 112 in Q4 2025)

The Outlook for H2 2026

The Monetary Authority of Singapore maintains its current policy stance, allowing SORA to track US rates with a modest lag. Fed futures currently price in two additional 25-basis-point cuts by year-end, which would translate to SORA approaching 0.95-1.00% by December 2026.

That timeline means serious buyer activity likely picks up in Q1 2027 rather than the current quarter. Developers understand this, which explains why several have delayed launches originally planned for Q2 2026 into late Q3 or Q4.

For buyers, the strategic calculation is whether to lock in current rates (already historically attractive) or wait for further declines that may or may not materialise. For sellers, the question is whether to accept today's market or hold for a rate-driven recovery. Neither side has a definitive answer — which is why transaction volumes remain 18% below the ten-year average.