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The Singapore real estate market is expected to grow steadily from 2024 to 2029, with a predicted market size of USD 64.04 billion by 2029. The market is expected to continue growing, with the index reaching around 228 points in 2025 and 241 points in 2026. This means that the residential sector will continue to grow and expand. In fact, Singapore is expected to grow at a 9% rate through 2027, placing it among the top three global wealth management hubs.
The Singapore real estate market trend has seen significant changes, particularly in the residential sector, driven by a shift in interest rates, robust U.S. economic performance and an uptick in equity markets. By 2028, the number of wealthy individuals globally is projected to increase by 28.1%, with strong growth in Asia, particularly in India and the Chinese mainland.
Singapore is expected to lead the Asia-Pacific region with a wealth threshold of US$5.2 million, attracting emerging wealth from neighbouring countries such as Indonesia, Thailand, Malaysia and Vietnam. The challenge will lie in encouraging the ultra-wealthy population to invest locally. The arrival of family offices has had minimal impact on the residential property market; encouraging deeper roots for these private institutions is crucial for broader investment.
Rise in Residential Segment
Despite global economic challenges, Singapore’s residential property market remains resilient, with capital values growing by 3.1% across the world’s leading prime markets through 2023. This growth is driven by the expanding cohort of wealthy individuals who view real estate as a favourable investment opportunity. Almost a fifth of ultra high net worth individuals (HNWI) plan to invest in commercial real estate this year, while more than a fifth plan to buy residential properties.
For investors, residential returns were supported by prime global rents rising at an average of three times their long-run trend. While some sectors, such as commercial real estate and private equity, grappled with the lingering impact of elevated debt costs, residential property values have remained strong. Despite the repricing of property, growth over the forecast period provides various opportunities for investors in Singapore, particularly developers able to deliver properties that suit the shifting tastes of the newly minted.
Prices have continued to rise, with a 13.7% year-on-year growth in the second half of 2023, making it the strongest in the Asia-Pacific region.
The market has seen a supply shortage, contributing to the price growth. However, the housing supply is increasing, and new projects are being completed, which may lead to a softening of rental rates and more bargaining power for tenants.
To curb price pressures, the government has introduced increased stamp duties for foreigners and higher levies on foreign buyers, slowing down the market. From Q4 2019 to Q1 2023, foreign buyers accounted for an average of 4.7% of all non-landed transactions quarterly, with a stable quarterly average of 231 units. Foreign sales remained steady during the pandemic, never exceeding 300 units per quarter. In the Core Central Region (CCR), foreign buyers made up a higher proportion, averaging 11.7% of total sales volume quarterly, ranging from 7.8% to 17.7%.
There is a renewed interest in older, mixed-use properties offering a unique blend of residential and commercial spaces, making resale private properties on the rise. Modern developments are also allocating more space to common facilities, enhancing the overall living experience for residents. There is a growing preference for larger, more desirable, and valuable units.
With rising COE rates and GST, more Singaporeans are being priced out of cars, increasing demand for properties near MRT stations. Proximity to multiple train lines is becoming increasingly important, with stops like Paya Lebar, Outram and Serangoon being highly valued.
These trends and projections highlight the dynamic nature of the Singapore real estate market, which is driven by a combination of government policies, demographic changes and economic factors.
Luxury Housing Market Demand Continues
Recent data from Savills indicates that Singapore’s prime residential market has shown resilience, with capital values growing by 3.1% across the world’s leading prime markets through 2023. The Core Central Region (CCR), known for its luxury properties, has seen steady demand from local and foreign buyers. The limited supply of new luxury homes in prime locations has further driven up prices, making these properties highly sought after.
The luxury housing market in Singapore is expected to experience several trends in the second half of 2024, especially with the growing demand for sustainable homes. The trend of a new generation of buyers prioritising sustainability has led buyers to pay more for properties that align with environmental goals.
Generative AI will become increasingly important in the luxury housing market, allowing buyers to visualise potential renovations and design changes more effectively. However, its primary role will likely be in creating immersive virtual tours, renderings and property visualisations to enhance the marketing of luxury homes rather than directly assessing property values or growth rates. This technology can help buyers better envision the potential of properties that may initially seem less desirable or need renovations, uncovering value opportunities. However, real estate experts’ professional appraisals and market analysis will still be crucial for accurately evaluating property values and projecting market trends.
Buyers, however, continue to prefer turnkey properties that are ready for immediate occupancy strongly. This demand is driven by the desire for convenience and the avoidance of renovation projects.
Rising Popularity of Leasehold versus Condominiums
The rising popularity of leasehold condominiums in Singapore indicates that these properties increasingly give their freehold counterparts a run for their money.
The allure of owning a property that can be held indefinitely and passed down to future generations makes freehold condos highly desirable. However, data from the Urban Redevelopment Authority (URA) shows the price gap between freehold and leasehold condos has narrowed considerably over the past decade.
“Many buyers are increasingly choosing leasehold condos for their affordability and prime locations”, says Sunita Gill, cofounder and COO of Singapore Luxury Homes. “The significant increase in prices for leasehold condos reflects the value that buyers in the market, reflecting a broader trend of demand for properties that align with their lifestyle”.
URA data shows that the median price of leasehold condos in 2023 was $1,246 psf and has since increased to $1,885 psf in 2023. The gap between the price of leasehold and freehold condos was 20%. A decade later, the gap observed in 2023 narrowed to 4.7%, attributed to the value of leasehold condos surging by 51.3% compared with 32% for freehold.
The supply of leasehold condos has been increasing, with many new projects being completed. This increased supply, coupled with government measures like higher stamp duties and levies on foreign buyers, has helped to moderate price pressures. The expected completion of only around 10,000 new homes indicates a potential softening of rental rates, giving tenants more bargaining power.
Condominiums Currently on the Market
Outlook for the Second Half of 2024
Prices of private residential properties in Singapore increased by 1.4% in the first quarter of 2024, compared with a 2.8% increase in the previous quarter. Prices of landed properties saw a 2.6% increase in the first quarter of 2024, moderating from a 4.6% increase in the previous quarter. The second half of 2024 is expected to see a continued slowdown in Singapore’s private residential property market.
The rental market is expected to bottom out in the second half of 2024, with rents potentially stabilising or increasing slightly due to lower supply and better economic growth. In the first half of 2024, rents may remain weak due to the absorption of excess private non-landed homes. The supply of private non-landed homes is estimated at 9,636 units, significantly lower than the 19,390 units in 2023. From 2024 to 2028, the average annual supply is projected to be 6,789 units, compared to 8,119 units annually over the previous five years.
In the second half of 2024, Singapore’s private residential property market is projected to slow, with prices expected to grow at 4.9%, down from 6.8% in 2023. The rental market may stabilise or slightly increase due to lower supply and better economic growth, but rents could remain weak initially as the market absorbs 9,636 new private non-landed homes, compared to 19,390 in 2023. The average annual supply from 2024 to 2028 is projected at 6,789 units, lower than the previous five-year average of 8,119 units.
Landlords in city fringe areas may face increased competition, potentially softening rental rates. There is rising demand for larger units in the suburbs as buyers seek better value, and developers are incorporating eco-friendly designs to meet this demand. The government’s temporary relaxation of occupancy caps for larger units may lead to more flexible housing arrangements, though its impact may be minimal due to higher taxes and maintenance concerns.
These trends reflect ongoing adjustments in Singapore’s private residential property market, driven by economic conditions, government policies, and shifting buyer preferences.
