2024 Market Trends for Properties in Singapore
- Goh James
- Jun 14, 2024
- 4 min read
Updated: Jun 28, 2024
Singapore has experienced consistent population growth over the past decade, with the population increasing from approximately 5.47 million in 2014 to around 5.92 million by 2023. This growth, driven by natural increase and immigration, has significantly impacted the property market, contributing to dynamic changes and trends in the real estate sector.
Market Overview
In recent years, the Singapore property market has experienced various fluctuations due to economic conditions, government policies, and global events like the COVID-19 pandemic. As of 2023, the market is showing signs of recovery and growth, although some challenges persist.
Residential Property Trends
The residential property market in Singapore has been buoyant, with rising demand for both public and private housing. Key trends include:
Housing and Development Board (HDB) flats continue to be a popular choice among Singaporeans. The government's efforts to enhance affordability and accessibility have kept demand for HDB flats strong. New projects and upgrades to existing estates have attracted significant interest. By 2023, there were about 1.13 million HDB apartment units in Singapore, up from approximately 953 thousand in 2014. The price trends for resale HDB flats remain positive, with the overall average price at $564 psf last year, an increase of 6% from $532 psf in 2022 and a surge of 27.9% from $441 psf in 2014.
The private residential market has shown resilience despite government-introduced cooling measures to curb speculative activities. There has been steady demand, particularly for new launches. High-end and luxury segments have attracted strong interest from foreign investors, driven by Singapore's reputation as a safe and stable investment destination. However, rental demand for private residences has declined. According to Savills Research Singapore, 82,257 private residential properties were rented out in 2023, an 8.9% decrease from 90,291 transactions in 2022. This drop is attributed to higher rental rates caused by increased mortgage rates and property taxes.
Demand has noticeably shifted 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 expected to continue as remote working becomes more common.
Commercial Property Trends
The commercial property market in Singapore has been influenced by changing work patterns and economic conditions. Key trends include:
The rise of hybrid work models has redefined the demand for traditional office spaces. 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 URA data, the net lettable area (NLA) of occupied office space increased by approximately 96,900 square feet in Q4 2023, down from 247,600 square feet in the previous quarter. The islandwide vacancy rate for office space slightly declined to 9.9% at the end of Q4 2023, down from 10% at the end of Q3 2023.
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.
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 centers to support increasing data storage and processing needs.
Government Policies and Initiatives
The Singaporean government continues to play a crucial role in shaping the property market through various policies and initiatives:
To prevent the property market from overheating, the government has implemented cooling measures, including higher stamp duties, loan restrictions, and tighter regulations on foreign ownership. Property buyers must also consider the latest buyer stamp duty (BSD) rates. A recent cooling measure includes the increase in BSD rates for higher-value properties: the portion of a property’s value exceeding S$1.5 million and up to S$3 million is now taxed at 5%, while any value above S$3 million is taxed at 6%.
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 an increase in Additional Buyer’s Stamp Duty (ABSD) rates to promote a sustainable property market. The revised rates took effect in April 2023. This presents a challenge for local property investors, as Singaporeans and Permanent Residents now face higher taxes when purchasing a second or additional property in Singapore. Consequently, some may consider investing in overseas properties to expand their real estate portfolios without incurring the increased ABSD. Alternatively, investors might consider 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. Want to know more about property investment in Singapore? Contact us for a no strings attached learning session by tapping on the button below!
Sources:
Article referenced from Amanda Chuah
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