In 1995, a general manager with a manufacturing company in his early 40s named Mr Zachary Tsai (not his real name) paid off about $1.3 million for a second house. Earning a five-figure wage, he owned a semi-detached house in Upper East Coast, where he lived with his wife and four kids.

However, forced by his rich friends, he pooled his earnings of $300,000 with his sister to lay a deposit on a 31-unit leasehold development in the Upper East Coast area, the 3-story cluster house in Kew Gate.

Planning to sell it after ten years, and confident of earning a good income, he took a 90 percent bank loan. Thoughts of losing his job or dropping of house prices never came to him. However, the unimaginable turned into a bitter reality.

He lost his job in 2001 when his employer merged with another company.

He was able to deal monthly defrayments on the loan using the remainders of his savings, yet that didn’t leave for his family.

Desperate of paying his bills, Mr. Tsai attempted to sell the cluster house where his mother and sister had been living, but was not able to do it for two long years.

Though he got his new job in 2003, his wage only covered with the monthly defrayments. The SARS epidemic then hit and house values dropped further. Mister Tsai, who’s already in his late 50s, ultimately decided to dispose the house at a bank proceeding sale for $680,000 in 2003 – $300,000 below valuation and almost half of the original price. All in all, he lost approximately $700,000 on the house.

Today, the Tsai family owns and lives in a five-room HDB apartment in the Upper East Coast, bought from the savings of Mr. Tsai from the Central Provident Fund. “I’ve dreamed of owning private property again and going back to a semi-D. But next time I’m not going to think twice – I’m going to think three or four times,” says Mr. Tsai.

M.K. Kung, a home owner at 42, has also been affected by dropping prices.

In 1996, she bought a two-bedder at Yio Chu Kang condo Seasons Park for approximately $700,000 with her husband. They still live there with their kids, but she estimates that present price of the flat is only $650,000 or lower.

Mrs. Kung and Mr. Tsai had fell for what Propnex CEO Mohamed Ismail calls “the myth that prices would only keep going up”.

Other property analysts describe parallels with the good industry we have now, but are sharp to notice differences between today’s situation and the last property drop.

“The market right now is reminiscent of 1996 in atmosphere with the queues, the packed showrooms and good take-up rates for popular projects. But the level of speculation now has not reached the feverish state seen in 1996 and it’s still too early to tell whether it will turn out the same way”, says Chua Chor Hoon, DTZ’s head of South-east Asia research.