Singapore property market forecasted to ‘standstill’ next year

Romesh Navaratnarajah11 Dec 2018

Private home prices in Singapore could remain flat or decline by up to three percent next year.

Singapore home prices that are expected to increase by as much as 10 percent this year could remain flat next year or decline by up to three percent, according to estimates from property brokers compiled by Bloomberg.

Home sales, which fell behind 2017 levels this year, are also expected to reach below that mark next year.

More: Govt Trims Land Sales Amid Large Supply, Softer Demand

The pace of residential property price hikes is slowing following the government’s introduction of new property cooling measures in July. The curbs were prompted after prices climbed about seven percent during the first six months of 2018, on the back of aggressive land bids from developers and en bloc sales.

New rules limiting the number of “shoe-box sized” apartments that developers can build as well as anti-money laundering safeguards restricting builders, also pose further constrictions.

“The market has come to a standstill,” said Knight Frank’s Singapore research head Lee Nai Jia. “The government is unlikely to introduce additional curbs or rollbacks as the market is stabilising.”

The government’s constant tweaking of rules and taxes related to the property market is a concern for home builders, said Smartkarma analyst Tan Kok Keong. It could raise developers’ cost while reducing the city-state’s appeal for international players.

The government, however, believes that it needs to intervene to prevent a bubble from forming. In fact, private home prices may have increased by up to 15 percent this year had it not acted, said National Development Minister Lawrence Wong in a speech last month.

“Let me be very clear that the government cannot and will not take a hands-off attitude to the property cycle…So there should not be any surprise when we intervene in the market, because that is our approach and attitude.”

In its annual financial stability review in November, the Monetary Authority of Singapore noted that a sharp property price hike, if left unchecked, may have run ahead of economic fundamentals while increasing the risk of destabilising correction later.

“Had the government not introduced the additional curbs, this bull run in the residential market would have continued for three years,” said ZACD Group executive director Nicholas Mak. In a best case scenario, prices are expected to remain flat next year, although declines of up to three percent may also occur, he said.

Developers’ aggressive land bidding are also forecasted to drop in 2019. CBRE revealed that en bloc sales totalled $10.8 billion from 37 transactions so far this year. CBRE Singapore research head Desmond Sim expects that to decline by about one-tenth in 2019.

“Given the sizable supply pipeline from public land tenders and private collective sale sites accumulated before the curbs, developers are likely to be more cautious,” said Colliers International Singapore research head Tricia Song. As such, developers are expected to “pace out their launches to ensure the market remains sustainable in the coming year”.

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Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email

Dec 12, 2018
Supply glut from 2019 onwards hence pushing prices southward.

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