The Future of Singapore’s Real Estate: Decoding the Market Amid Conflicting Signals
Introduction
Amid headlines warning of trade wars, tech layoffs, and impending cooling measures, Singapore’s real estate market seems almost paradoxical in its resilience.
On one hand, we see caution in the air. On the other, developers are making bold moves, such as the Bayshore GLS site drawing 8 bids and setting a new OCR land price benchmark of $1,388 psf ppr. More HDB upgraders are entering the private market, and private home ownership is at a high.
So, what’s really happening?
Let’s unpack the past, present, and possible future of Singapore’s property landscape, and figure out whether the market is peaking—or just getting started.
Article 1: Recession
A Look Back: How Has the Market Evolved?
Historically, the Singapore property market has seen its fair share of volatility. From the Asian Financial Crisis to the Dot Com bust, SARS, and the Global Financial Crisis—price drops followed every economic shock.
The game changed in 2013.
That year marked the introduction of aggressive cooling measures to reign in an overheating market. Since then, price movements have been far less dramatic. Why? Simple—speculation used to dominate the market. In the 1990s, up to 31% of transactions were speculative. Flipping was common, with little to no Seller Stamp Duty, loose LTV ratios, and no TDSR framework.
Now, it’s a different story. TDSR caps loans to 55% of income. LTV is capped at 75%. SSD and ABSD discourage flipping and excessive ownership. With stronger financial fundamentals, Singaporeans now have better holding power, meaning fewer distressed properties even in downturns. Case in point: despite a brief recession during COVID, private home prices dropped only 1% before recovering.
Refer to Article 1
COVID, Recovery, and The Surge in Prices
Even when COVID shook the world, Singapore’s property prices barely flinched. Transaction volumes dropped briefly, but prices still climbed 2.2% in 2020. Then came 2021 and 2022—with jumps of 10.2% and 8.4% respectively.
Why? A mix of factors:
Construction delays pushed BTO buyers into resale and private segments
Quantitative easing led to liquidity surges
Low interest rates made property attractive
Singapore’s COVID response boosted its status as a safe haven
But growth slowed in 2023 and 2024 (6.6% and 3.9% respectively) as interest rates rose sharply. Banks’ stress test rates hit 4.7%, shrinking buyer budgets and causing many to delay their purchases.
Refer to Chart 1
Chart 1: Private Property Index
Supply: The Real Bottleneck
Today’s real challenge isn’t demand—it’s supply. There are only 19,940 uncompleted unsold units in the pipeline, well below the 10-year average of 24,000.
Why the shortfall?
The en bloc market has been dormant. Developers face higher ABSD (40%), escalating construction costs, and tough lease renewal requirements. With owners expecting high reserve prices due to increasing replacement costs, deals are hard to close.
The government has responded by releasing more GLS sites, but cautiously. Around 9,000–10,000 units annually—just enough to avoid oversupply. But GLS developments take 1.5–2 years to come online, causing lag in real-time market effects.
Even the TOP supply for private units will remain below 10k annually for the next few years, and only two EC projects will hit their MOP before 2028. On the resale side, transaction volumes are muted as many older owners are holding onto their multi-property portfolios to enjoy rental income without triggering ABSD liabilities.
Refer to Chart 2
Chart 2: Supply
So Who’s Buying?
Let’s talk demand.
Historically, 80% of Singaporeans live in HDB flats and only 20% in condos or landed homes. That figure is shifting. In 2024, 23% of households now live in private housing.
Here’s where it gets interesting: it’s not foreigners driving this. With ABSD for foreigners at 60%, they account for only 2% of the market. The biggest growth? Singaporeans, up from 73% of private home buyers in 2010 to 88% in 2024.
A huge part of that demand comes from HDB upgraders—those who profited from BTO’s and used that windfall for private property. Historically, 46% of private sales come from this group.
That number fell to 30% in 2024, likely due to soaring resale HDB prices and high interest rates. Supply constraints of MOP flats due to COVID disruptions have also played a role—but supply is expected to rise again after 2027.
Refer to Chart 3
Chart 3: Private Property Index
Risk Signals from the HDB Sector
The HDB market’s health directly impacts the private sector. As resale HDB prices climb, the value gap between public and private narrows. If HDB prices continue to soar, more buyers might skip resale flats entirely and jump straight into private properties.
However, there are still risks.
New cooling measures targeting HDB buyers could reduce resale demand—and that would spill over into the private market. Here’s the twist: from 2017 to 2020, even as HDB prices dropped, private home prices rose. Why? Because HDB owners rushed to upgrade before prices fell further—fueling demand in the private sector.
If prices stagnate again while MOP supply ramps up in 2027, we could see history repeat itself.
Refer to Chart 4 and Article 2
Chart 4: Private Property Index
Article 2: HDB Upgrade Demand
Financial Firepower: Can Singaporeans Still Afford Private Homes?
Let’s get into the numbers.
Today’s buyers are financially stronger than ever. In 2013, household debt often matched or exceeded liquid assets. Now, households hold $279 billion more in liquid cash than liabilities.
Where’s this cash coming from?
Higher household incomes
COVID-era liquidity boosts
Investment gains
Intergenerational wealth transfer
Younger buyers (aged 26–35) now make up 35% of private home purchasers, up from just 9% in 2015. Many are backed by their parents, who are co-investing using their children’s names to avoid ABSD.
On the income side, 1 in 5 households now earns over $20k monthly. At the 7th–10th income deciles, the average property budget ranges from $2.2M to $4.5M. These buyers aren’t speculators—they’re end-users, often upgrading from OCR to RCR and eventually CCR.
With current average LTVs at just 41%, borrowing capacity remains strong. And with population aging, Singapore could continue to welcome new PRs and citizens—bringing with them more demand for housing.
Refer to Chart 5
Chart 5: Proportion New Private Home Buyers by Age (2015-2023) and median age of buyers
Where Are We Headed?
Despite external risks like trade wars or cooling measures, the underlying fundamentals of Singapore’s real estate market remain robust. There’s strong demand, limited supply, and significant buyer firepower.
Unless there’s a drastic policy change or global meltdown, prices are expected to continue their upward trend—especially as supply remains tight and more MOP flats enter the market post-2027.
If you’re a buyer, seller, or just a curious observer, understanding these dynamics helps you stay ahead in a market that, while confusing at times, continues to reward those who move with strategy.
Confused by all the conflicting headlines and how the latest news on tarrifs and financial markets volatility will affect the property market? Are we already at a peak?
Today, STL Properties seeks to unpack the future of Singapore’s real estate market with never seen before hard data and insights, so sit tight and enjoy our video!
