Real Estate Trends & Property Market Insights For Singapore

Staying ahead in Singapore's ever-evolving real estate market requires a deep understanding of current and emerging trends. In 2023, residential property sales started to cool due to rising interest rates and cooling measures. At the same time, the commercial sector grappled with the implications of hybrid work models and shifting business needs.

As we move into the future, investors and businesses alike seek clarity on the future direction of the market. Will these trends persist? What new factors will shape the landscape? This article explores the evolving dynamics of Singapore's property market, offering insights into potential trends and emerging opportunities in both residential and commercial sectors.

Property Market Insights Source: DataSense

The insights presented in this article are derived using data from DataSense, a leading real estate data platform by PropertyGuru for Business that procures and processes data from trusted sources. By leveraging the power of data analytics and predictive modelling, DataSense unveils critical real estate trends in Singapore, providing stakeholders with the information needed to make informed and confident decisions in the property market.

Trend 1: Resilient Property Prices in the Private Residential Sector Despite Declining Demand

Singapore's private residential property prices have shown remarkable resilience despite a noticeable decline in demand. Factors such as property cooling measures and Additional Buyer’s Stamp Duty (ABSD) hikes have significantly impacted buyer interest, particularly among investors and foreign buyers. These measures were implemented to stabilise the market and prevent overheating, but they have also resulted in reduced transaction volumes and slower sales activity.

Despite these challenges, property prices have remained stable, reflecting the market's underlying strength and the sustained confidence of property owners. Many sellers are holding firm on their asking prices, buoyed by the long-term value and attractiveness of Singapore's real estate, as well as previous trends of increasing prices over time. This resilience is also supported by limited supply in certain desirable locations and a steady demand from local buyers seeking quality properties. As a result, the property market continues to exhibit a strong price foundation even amid shifting demand dynamics.

DataSense Analysis

Using the Demand Analytics feature in DataSense, we can observe the median PSF growth for private residential property sales within specific districts/estates in Singapore. The data indicates most areas experiencing a small increase in median PSF growth, with Marine Parade as an outlier with a 4.9% increase. At the same time, all districts show an increase in median PSF growth compared to last year. 

Finally, it is important to note that the basis for PSF growth calculation differs between non-landed and landed homes, as the latter includes the land area around the house. 

Trend 2: Demand for Million-Dollar Flats Remains Strong

Despite economic uncertainties and market fluctuations, the demand for million-dollar flats in Singapore remains strong. The demand primarily originates from first-time buyers and HDB upgraders seeking private properties but were priced out in a post-pandemic property market. These buyers were house hunting for private homes above 1,000 sq ft but turned to resale flats due to high private home prices and interest rates.

DataSense Analysis

Using the DataSense Project Comparison feature for million-dollar HDB flats, we see consistent PropertyGuru Market Index (PGMI) across the top 10 projects in Singapore with a demand median price of $1 million and above. PGMI is based on the demand-to-supply ratio of weighted visitors divided by unique listings, indicating that demand remains strong relative to supply.

Trend 3: Fewer Foreigner Property Purchases Due to Steeper ABSD Rates

The implementation of steeper Additional Buyer’s Stamp Duty (ABSD) rates, which were raised up to 60%, has significantly reduced the number of foreign property purchases in Singapore. These increased rates were introduced as part of the government's cooling measures to curb speculative buying and stabilise the market. As a result, real estate trends indicate that many foreign investors find the higher costs prohibitive, leading to a notable decline in their participation in the Singapore property market.

DataSense Analysis

DataSense analysis reveals a marked decline in foreign demand and buyer activity across several key regions in Singapore, including the Core Central Region and prime residential districts. The data highlights a reduction in property transactions involving foreign buyers, particularly in luxury segments where ABSD impacts are most pronounced. This trend underscores the effectiveness of the cooling measures in moderating foreign investment in the property market.

Trend 4: Property Seekers Turning Towards Recently Completed Homes Which Offer More Value

Current property market trends and housing policies are steering property seekers in Singapore towards recently completed homes that offer greater value. With rising living costs and economic uncertainties, prospective buyers are recalibrating their expectations as attractive properties with large spaces in well-connected neighbourhoods become out of reach. 

DataSense Analysis

Demand Analytics from DataSense indicates an increase in PGMI growth for properties in the Outside Central Region (OCR), suggesting a property market trend of buyers gravitating towards more affordable housing options such as more compact units or properties in the OCR but near MRTs.

DataSense Maps indicate that the supply/demand index for OCR areas in Singapore is higher compared to central regions and other traditionally more attractive areas. This supports the real estate trend which suggests a growing preference for properties in OCR locations, driven by their perceived better value and affordability.

Looking Ahead: Navigating Singapore’s Property Market

Understanding real estate trends and insights is crucial for making informed decisions in Singapore's dynamic property market. As we look to the future, it’s essential to recognise how factors like rising residential demand and changes in foreign purchases due to steeper ABSD rates will influence the market. Additionally, the growing preference for value-oriented homes highlights the evolving priorities of buyers.

Platforms like DataSense play a vital role by providing comprehensive insights into past trends and helping stakeholders identify recurring patterns. With useful features like Demand Analytics to aid in future forecasting, stakeholders with DataSense can stay ahead of the curve. Leveraging these insights will be key to navigating the complexities of the market and capitalising on emerging opportunities in the property market.