Singapore Property Market in 2023: My Thoughts

2018 – 2019 was probably the last “best” time to purchase Singapore property. Back then I recall there was much talk of a property oversupply that according to a Straits Times article, “could take years to clear“.

That was because of the Enbloc craze in preceding years which gave rise to many new project launches, some of which mega-developments with 1000+ units. Riverfront Residences, Parc Clematis, Normanton Park, and the mother of them all, Treasures at Tampines, just to name a few.

Now in 2023, it is very clear that buyers who dared to take the bold step in purchasing property then have been handsomely rewarded, with the Property Price Index increasing for 20 of the last 23 quarters since 3Q2017.

Today the private residential property index in 1st Quarter 2023 is 194.8 points. Do we recall what it was back in 3Q2017? 137.6. That’s a staggering 41.6% increase in less than 5 years. Putting this in context, the last strongest rally was in the aftermath of the 2008 sub-prime crisis where the index rebounded strongly from a low of 95.3 in 2Q2009 to 154.6 in 3Q2013. 

Currently at an all-time high, market participants have mixed feelings. Equal part dumbfounded at how properties both old and new continue to fly off the market (who’s buying?? Is a common question), and at the same time cautious at macro events, high interest rates, inflation, and geopolitical tensions.

And yes, if you’re thinking, ‘why haven’t I mentioned the latest new cooling measures: The ABSD increases’ yet? I’ll get to that later.

How do we decide how to best proceed?

Humans, we actually have short memory. Like goldfish haha. Well, maybe not that bad, though sometimes we can forget what we want to do the moment we get to the place to do it. Lol.

However, the market never forgets, and we can always look back at past data to remind us of history and observe lessons which can benefit our future decision making.

Ask any property owner over the last 40 years, and I think barely you can find many whom property did not yield positive monetary benefits for. Yet there surely were losses among them. Speculators who overleveraged and made the wrong bets at the wrong time, foreign buyers who faced financial difficulties back home and had to offload their Singapore properties or even local ordinary folk who were badly affected by the numerous global events that adversely affected Singapore in the 90s and 2000s. For example, the ‘97 Asian Financial Crisis, ’00 Dot-Com Bubble, Sept 11, SARS in 2003, and of course the subprime crisis in 2008.

To give a measure of uncertainty in the housing market, we can look at standard deviation, which is a measure of volatility. The 90s returned 6.18% while the 2000s were only slightly less volatile at 4.74%. With a high homeownership rate of above 90%, these movements affected many. You could even go as far to say that the housing market was like a casino, where punters can purchase a piece of paper with little heed to financing and then sell it off to the next highest bidder for a tidy profit. A practice known as option flipping which was prevalent those days.

Since then, with full credit to a capable government (with some hiccups along the way), they have learnt that as a small island nation we have to make changes to be more self-reliant and less dependent on external forces. Tough decisions had to be made. For example:

  • April 2005, the announcement to develop two integrated resorts which would combine casinos with other entertainment facilities, at Marina Bayfront and Sentosa.
  • The implementation of the Comprehensive Economic Cooperation Agreement (CECA) with India in 2005, which allowed the influx of Indian nationals into Singapore to meet the growing demand for skilled workers.
  • The 2013 Population White Paper which projects a target of 6.9 million population by the year 2030.

At the same time cooling measures were introduced to stabilise the housing market and to discourage speculation. Between the years 2009 and 2013, there were no less than 8 of such measures. The most significant, the Total Debt Servicing Ratio (TDSR) in June 2013 which no doubt played a big part in the market’s consecutive decline for 15 straight quarters from 4Q2013 to 2Q2017.

As our DPM Lawrence Wong previously said in 2018, “The Singapore property market is among the most regulated in the world. This is because we have learned from past property cycles and financial crises that bubbles do not benefit Singaporeans in the long run.”

Did it work? Data shows a resounding YES! Standard deviation was a mere 1.74% for the period post 2013. This is a marked improvement in stability since the 90s and 2000s. Lawrence Wong and team would certainly be satisfied.

Furthermore, in the UBS Global Real Estate Bubble Index, an annual report of housing price bubbles among select cities worldwide, Singapore ranks in the bottom 5. Especially telling, is this chart which compares the index scores of Singapore against Hong Kong.

2013 was the year where Hong Kong’s property prices diverged from Singapore and continued in different directions. While both countries have recently benefitted from the reopening of China, Hong Kong’s real estate is still setting new records, with a news article in March reporting of a HK$1.2 billion (S$202.8 million) transaction for a mansion in Hong Kong’s Peak area. That amounts to a record per square foot price in Asia of HK$255,000 (SGD$43,000 psf). Singapore’s property record psf isn’t even a quarter of that.

Consequently, despite our Singapore government’s increase of the foreigner Additional Buyer’s Stamp Duty (ABSD) to 30% in December 2021, it remained attractive. Particularly to mainland Chinese buyers. Some recent purchases made by this group are: a Klimt Cairnhill Duplex Penthouse, and 4 units at Orchard By-The-Park. More recently, this foreigner ABSD was further doubled to 60% from 27 April 2023, in addition to other ABSD tweaks. 

This change makes Singapore one of the most expensive cities in the world for foreigners buying residential property and will surely slam the brakes on this market segment. That said, we shouldn’t see too much of an impact on the broader market as based on 2022 data, the ABSD rate increases will only affect about 10% of residential property transactions.

Tellingly, the first project launch merely days after the announcement at Blossoms By The Park, a 99-year leasehold project near Buona Vista MRT had Chinese buyers purchasing four 2-bedroom apartments.

I foresee more Chinese considering properties in the fringe regions where prices per square foot can be half that of central area luxury properties. Rentals of high-end property would also increase as it would now be much more affordable to rent than to purchase. Many foreigners would prefer to wait for PR status before purchasing, as ABSD drops to a palatable 5% for permanent residents.

How Does Knowledge of the Singapore Property Market Past and Present help us?

Let’s return to my opening statement: 2018 – 2019 was probably the last “best” time to purchase Singapore property. Why do I quote ‘best’? Because best is subjective. If you take a longer-term view on the charts, one can definitely say that the early 90s or the mid-2000s were better times. Alas, one can never turn back the clock to those days. I was still a young kid, and the world was so different then.

Yet even as a buyer who purchased during the peak in 2007 or 2013, through a longer period of holding and rentals have realised significant gains on their property purchase.

Hindsight is always 10/10 and I do understand it can be scary looking at the price chart now, not knowing what the future will bring. If you really think about it, neither did any of the buyers who bought at any time in the past. Buy when its down trending, and you might fear it would fall further. Buy when it’s up trending and you fear a reversal. No one knows with 100% certainty what the future will bring. What we can do is make smart bets with the information on hand.

If I may summarise:

  1. Global crises have cemented Singapore’s status as a safe haven of the world.
  2. Government intervention in the housing market has ensured an environment of low volatility.
  3. Singapore is a top destination for mainland Chinese seeking an exit.

Real estate remains the only investment vehicle where interest rates are low, comparatively, and you can leverage on Other People’s Money (OPM). A dual use asset which has physical properties, acts as a hedge against inflation, and you can even live in it.

In 2023, as we see the number of new home supply increases as 30-40 new launches hit the market, it harks back to a similar time few years ago. No doubt, new supply will exert downward pressure on the market, and I foresee that a few years later, we might look back at this current period as the last “best” time to purchase Singapore property.

The More Important Question: What to Buy?

Looking at recent new launches and sales percentage achieved on launch day as follows,

Blossom by The Park – 75%

Tembusu Grand – 53%

Botany Residences – 48%

Lentor Modern – 84%

Sceneca Residences – 60%

Tenet – 72%

Terra Hill – 38%

Does it mean certain developments with higher sold percentage at launch are better vis-a-vis other launches?

My name is Jim Tay, I’m a property consultant in Singapore. I strongly believe that Real Estate is one of life’s largest assets that has to be planned for carefully. With the latest market insights and strategies, I advise my clients and give them support throughout their property journey. If you want to work with me, get in touch via my Contact Form, drop me an email at, or simply WhatsApp me at +65 8333 7213.

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