Singaporean commercial real estate market continue to thrive, housing market expected to rebound

A revival in demand for “safe-haven purchases” may benefit the real estate market

Colliers forecasts a strong performance in Singaporean real estate investment sales this year. Noppasin Wongchum/Shutterstock

Earlier this year, it was predicted that Singapore’s housing market is expected to rebound faster than any other Southeast Asian country as the country accelerates its vaccination program.

Recently, however, as commercial real estate continues to thrive, private home sales are experiencing turbulence as the market faces unfortunate circumstances.

Insights from Colliers forecasts a strong performance in Singaporean real estate investment sales this year. 

John Bin, director, capital markets & investment services, Singapore at Colliers said, “As Singapore transitions to an endemic stage and with the gradual reopening of borders, we expect investment volume to continue its strong run.”

He added, “As yields compress, we are seeing greater investor interest for assets with potential for value-add and flexible usage,” referring to shophouses, warehouses, and CBD offices with redevelopment potential.

Commercial sales increased 62.9 percent quarter-on-quarter (q-o-q) to end the year, up 10.4 percent year-on-year (y-o-y).

More: Singapore real estate emerges from pandemic slump

On the other hand, new private home sales have experienced a massive drop in February, reported The Business Times. This can be attributed to cooling measures, the declining housing supply, and global uncertainties. 

According to figures released by the Urban Redevelopment Authority (URA) today, 15 March, developers in Singapore sold 527 new private residences in February, down 22.5 percent from January’s 680 units. In February 2021, 645 new private residences were sold, which is an 18.3 percent decrease.

Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, expects supply to worsen this year, with the number of new homes dropping 20 percent, which is approximately 9,000 units, including executive condominiums (ECs).

In light of global uncertainties, Sun pointed out that market sentiment can play a major role in housing demand. For example, the Russian-Ukrainian conflict has greatly affected businesses worldwide, impacting natural gas, oil, and stock prices.

That said, she also noted that escalating tension could lead to a revival in demand for “safe-haven purchases,” saying, “Looming uncertainties may instead benefit our real estate market as investors shift their focus back to defensive asset classes like properties.”

The Property Report editors wrote this article. For more information, email: [email protected].