2024 Singapore Properties Trend

Over the past decade, Singapore has witnessed consistent population growth. In 2014, the population stood at approximately 5.47 million. By 2023, it had risen to around 5.92 million, reflecting a steady increase driven by both natural growth and immigration. This population growth has exerted considerable influence on the property market, contributing to dynamic changes and trends in the real estate sector.

Market Overview

The property market in Singapore has experienced a series of fluctuations over the last few years, influenced by various factors including economic conditions, government policies, and global events such as the COVID-19 pandemic. As of 2023, the market has shown signs of recovery and growth, although challenges remain.

Residential Property Trends

The residential property market in Singapore has been buoyant, with rising demand for both public and private housing. Key trends include:

1. Increased Demand for Public Housing (HDB Flats):

???- The Housing and Development Board (HDB) flats continue to be a popular choice for many Singaporeans. With the government's ongoing efforts to enhance affordability and accessibility, the demand for HDB flats has remained robust. New projects and the upgrading of existing estates have attracted significant interest. In 2023, there were around 1.13 million Housing Development Board (HDB) apartment units in Singapore, compared to approximately 953 thousand in 2014. The price trends of HDB flats have continued to remain positive. The overall average price for resale HDB flats was $564 psf last year, which marked an increase of 6% from $532 psf in 2022 and a surge of 27.9% from $441 psf since 2014.

2. Resilience of the Private Residential Sector:

???- The private residential market has also shown resilience. Despite cooling measures introduced by the government to curb speculative activities, there has been steady demand, particularly for new launches. High-end and luxury segments have seen strong interest from foreign investors, driven by Singapore's reputation as a safe and stable investment destination. Although the private residential sector is resilient, the rental demand for private residence has dropped. According to Savills Research Singapore, in 2023, throughout 2023, a total of 82,257 private residential properties were rented out across Singapore, representing an 8.9% decrease compared to the 90,291 transactions recorded in 2022. It is assumed that the drop is due to higher rental rates caused by higher mortgage rates and property taxes.??

3. Shift Towards Suburban Areas:

???- There has been a noticeable shift in demand towards suburban areas. The COVID-19 pandemic has accelerated the desire for more spacious living environments, leading to increased interest in suburban condominiums and landed properties. This trend is likely to continue as remote working becomes more common.

Commercial Property Trends

The commercial property market in Singapore has been affected by changing work patterns and economic conditions. Key trends include:

1. Flexibility in Office Space:

???- The demand for traditional office spaces has been redefined by the rise of hybrid work models. Companies are increasingly seeking flexible office solutions, including co-working spaces. This trend has led to a surge in the development of flexible office spaces that can accommodate varying business needs. According to the URA’s data, the net lettable area (NLA) of occupied office space increased by approximately 96,900 square feet in Q4 2023, a decrease from the 247,600 square feet added in the previous quarter. The islandwide vacancy rate for office space slightly declined to 9.9 percent at the end of Q4 2023, down from 10 percent at the end of Q3 2023.

2. Retail Sector Adjustments:

???- The retail property sector has faced challenges due to the shift towards e-commerce. However, there is a growing trend of integrating experiential retail and lifestyle elements to attract consumers. Retail spaces are being repurposed to offer unique experiences that cannot be replicated online.?

3. Industrial Property Growth:

???- The industrial property sector, particularly logistics and data centers, has seen robust growth. The rise of e-commerce and the need for efficient supply chains have driven demand for logistics facilities. Additionally, the digital economy has spurred the development of data centres to support increasing data storage and processing needs.

???- In recent days, property agents in the industrial property sector are seeing lesser end users buying for their own use. More are moving towards renting due to market sentiments.?

???- Another factor to consider is the scarcity of industrial land sales in Singapore. In the first half of 2024, only 5 confirmed land plots are available, totaling 82,900 square metres, along with 4 reserved sites covering 54,600 square metres.

?Government Policies and Initiatives

The Singaporean government continues to play a pivotal role in shaping the property market through various policies and initiatives:

1. Cooling Measures:

???- The government has implemented cooling measures to prevent the property market from overheating. These measures include higher stamp duties, loan restrictions, and tighter regulations on foreign ownership. Property buyers also have to take into consideration the latest buyer stamp duty (BSD) rates. A cooling measure that the Singapore government put into place is the increase of the BSD rates for higher-value properties: the portion of a property's value exceeding S$1.5 million and up to S$3 million will now be taxed at 5%, while any value above S$3 million will be taxed at 6%.

2. Sustainability Initiatives:

???- There is a strong focus on sustainability in property development. Green building standards and incentives for sustainable practices are being promoted to ensure environmental responsibility. In 2023, the government announced that the Additional Buyer’s Stamp Duty (ABSD) rates will be increased to promote a sustainable property market. The revised rates took effect in April 2023. The revision of the ABSD rates presents a challenge for local property investors. Singaporeans and Permanent Residents will now face higher taxes when purchasing a second or additional property in Singapore. As a result, some may consider investing in overseas properties as an alternative to expanding their real estate portfolios without incurring the increased ABSD. Alternatively, investors might consider investing in industrial or commercial properties, which are not subject to ABSD.?

While challenges such as market cooling measures and the impact of the pandemic persist, the long-term outlook remains positive. Continued government support, coupled with a strategic focus on sustainability and innovation, will be crucial in shaping the future of Singapore's property market.