In November, Singapore’s new home market witnessed a surge of buyer enthusiasm, with 2,557 new private residential units sold in a single month, a ten-year high. This robust sales performance has sparked speculation about whether the government will introduce more measures to cool the property market.
Since 2009, Singapore has implemented 12 rounds of cooling measures to curb property prices. Barclays also released a report stating that the explosive growth in the private housing market in November increases the likelihood of price hikes, and history may repeat itself with buyers continuing to enter the market despite cooling measures. Observers also believe that this trend will continue to drive up prices, potentially recreating the wealth-building phenomenon seen from 2017 to 2019.
Table of Contents
Where Did the Year-End 2024 Property Frenzy Come From?
Singapore’s sales in November surged by 246.5% compared to October, with a total of 2,891 new homes sold, including executive condominiums. This marks the highest single-month sales volume in Singapore in over a decade.
Is a bull market coming?
Leo, a senior real estate expert from Xinhuale, shared his view: Don’t panic, the Singapore property market will be relatively stable in the next year or two, and there is no need for cooling measures at present. However, ready buyers should act when the time is right. It is predicted that Singapore’s rental prices will increase by 4% next year, and housing prices will continue to rise with interest rate cuts.
Despite the strong new home sales in November, this was due to the release of pent-up demand from the previous 10 months. The Singapore property market from January to October could be described as a “dry spell,” with an average of only 440 units sold per month. Overall, the total private home sales for this year are expected to be between 7,500 and 7,800 units, which is even lower than last year’s figures. Therefore, there is currently no bubble in the market, and cooling measures are not necessary.
Calls for Cooling Measures are Both Unreasonable and Unfair
There are comments circulating online suggesting that the government might adjust the Additional Buyer’s Stamp Duty (ABSD) and may not exclude local buyers purchasing their first residential property. A 5% ABSD is required for residential transactions above S$1 million.
The 2023 cooling measures, which raised the Additional Buyer’s Stamp Duty (ABSD) for foreign buyers from 30% to 60%, were intended to curb speculative “hot money” from foreigners. Currently, foreign buyers account for only 6% of transactions, so it is unlikely that speculation is driving up property prices. The majority of buyers are Singapore citizens or Permanent Residents (PRs), with owner-occupier and upgrading needs being the primary market drivers.
Regarding the calls to curb the booming property market by further increasing the Additional Buyer’s Stamp Duty (ABSD), Leo believes: “For first-time homebuyers, taxing them is neither reasonable nor fair. The ABSD was implemented to curb speculation; a first home is for owner-occupation or HDB upgrading needs. These are two different things and should not be conflated. Taxing genuine buyers will affect the real buyer pool, which contradicts Singapore’s long-standing policy of homeownership for all.”
Related Articles:
How Will the Singapore Property Market Perform in 2025?
Regarding the future direction of the Singapore property market, Leo believes it will primarily be characterized by “stability”—prices will see “steady growth,” and buyers should “maintain a steady mindset.” Major banks and analytical institutions have also indicated that private residential prices in Singapore are expected to rise by around 5% in 2025.
What factors will influence the Singapore property market in 2025?
Improving Fundamentals: Data from November 2024 showed that Singapore’s economy improved beyond expectations, with increased corporate hiring, a continuous influx of population, and a jump in the number of EP holders. These indicators lead to a continued positive outlook for 2025. However, global geopolitical issues could also affect Singapore’s economy, potentially causing market fluctuations. I recommend that buyers maintain a cautiously optimistic attitude.
Increased Supply: To balance the market, the government plans to release land for approximately 8,505 new housing units in the first half of 2025, an increase from the previous quarter. In November 2024, six new projects were launched, each with its unique highlights and scarcity, all targeting the mass market, which drove most of the sales. The number of housing starts will also increase in the coming year, and buyer interest is expected to continue. More choices may mean a higher chance of finding a desirable property and a greater opportunity to purchase. From the government’s perspective, a continuous supply of land is intended to provide buyers with ample options to stabilize market volatility.
Increased Supply Still Can’t Meet Demand: Singapore’s population has grown to over 6 million, and the construction of new HDB flats and condominiums is far behind the pace of population growth. It’s a case of “too many wolves for too little meat,” which is why promising and high-quality developments are quickly snapped up.
Housing Demand: Buyers purchasing for asset allocation purposes will continue to enter the market to hedge against inflation and strengthen their household balance sheets. Additionally, the expectation of lower interest rates in a global rate-cut cycle will ease the monthly mortgage burden for buyers, which will also boost purchasing sentiment. Furthermore, data released in October showed that resale HDB prices have risen for 18 consecutive quarters, with an increasing number of “million-dollar HDBs.” The demand from cash-rich HDB owners upgrading to private properties will continue to be released.
Buyer Sentiment: On the other hand, cautious buyers who are waiting and watching, uncertainty about the future economy, and a larger unsold inventory could limit the potential for further price increases.
Speculative Demand: It must be said that Singapore’s property market remains one of the most valuable investment destinations in the world. Profit-seeking capital will pour in along with the wealthy individuals flocking to Singapore. The net inflow of population, especially high-net-worth individuals, will continue to push up property prices.
For further enquiries, please get in touch:
WeChat: sgleokwek
Telegram: sgleokwek
WhatsApp: Message us
