It is a problem many city mayors would kill for. As soaring prices make home ownership unaffordable and housing bubbles threaten economic stability, Singapore’s house prices have been experiencing a steady run of deflation.

Core central prices dropped 4 per cent in 2014. At $2,050 per square foot, according to Savills, they are 11 per cent off their 2007 peak. Alan Cheong of the firm’s Singapore office says buyers are betting on further falls; transaction levels this year have slumped and only the desperate are selling — the market lost a further 3.3 per cent in the first quarter.

The price drops reflect overly successful efforts by the government to cool the market following steep inflation after the financial crisis. Several were targeted at foreign buyers, who in December 2011 were hit with a 10 per cent surcharge to the local 3 per cent stamp duty; a year later this was raised to 15 per cent.