The latest trends and investment prospects in Singapore's real estate market have garnered significant attention, especially considering the city-state's status as a bustling metropolis in Southeast Asia. In recent years, Singapore's property market has undergone several transformations, with the latest trends and investment prospects being of particular interest.

Latest Trends: Slowing Growth in Property Prices with Signs of Stability in the Market

source：CEICDATA

In recent years, the Singapore real estate market has experienced a series of adjustments, with government regulations gradually showing effectiveness and the market demonstrating signs of stable growth. In order to further alleviate the supply-demand imbalance, the Singapore government has introduced a substantial number of private residential units in its land sales program, reaching a ten-year high in supply in 2023. It is expected that the supply will continue to increase in the first half of 2024, marking the seventh consecutive half-yearly increase since the first half of 2021, further stabilizing market expectations.

According to data from the Urban Redevelopment Authority, although private residential prices have risen for six consecutive years, the rate of increase has slowed down, with an 8.6% year-on-year increase in 2022, lower than the previous year's 10.6%. Similarly, public housing resale prices have shown a similar trend, with a year-on-year increase of 10.4% in 2022, lower than 12.7% in 2021. This indicates that the government's real estate regulation measures are gradually guiding the market towards stability.

On the economic front, Singapore achieved a 2.8% year-on-year growth in the fourth quarter of 2023, with an annual economic growth rate of 1.2%. The Ministry of Trade and Industry has relatively optimistic economic prospects for 2024, expecting a growth rate between 1.0% and 3.0%. This positive economic outlook provides support for the real estate market, with developers expecting to sell between 7,000 and 8,000 units in 2024. Additionally, it is estimated that as many as 12 new projects will be launched in the first quarter of 2024, further enriching market choices to meet the needs of different homebuyers.

According to market research, the Singapore real estate market is expected to reach a size of $46.58 billion by 2024, growing to $64.04 billion by 2029, with a compound annual growth rate of 6.57% during the forecast period. This growth not only reflects the maturity of the market but also indicates the expansion potential in the coming years.

source:Mordor Intelligence

Details of Policy Changes: Adjustments to Stamp Duty and Commission System Reform
Policy changes have significant implications for the Singapore real estate market. In recent years, the Singapore government has implemented a series of policies targeting the real estate market, with the most notable being adjustments to additional buyer stamp duty (ABSD) and reform of the commission system.

For foreign buyers, the Singapore government has increased the tax rate for additional buyer stamp duty, doubling it from 30% to 60%, to limit the number of purchases by foreigners in the local market. The implementation of this policy has significantly reduced the proportion of foreign buyers, thus reducing the impact of foreign funds on the local real estate market.

The reform of the commission system is also a highlight of the Singapore real estate market. To change the previous unfair commission distribution method, housing agencies in Singapore have come together to introduce a new commission system. Under the new system, buyer agents can request buyers to pay commissions, with the commission rate determined through negotiation between the buyer's agent and the buyer.

Competitive Landscape and Market Leaders in the Singapore Real Estate Market
The competitive landscape of the Singapore real estate market is moderate, with prominent domestic and international companies such as UOL Group Limited, CapitaLand, and City Developments Limited holding significant positions in the market. The active participation of these companies not only promotes the healthy development of the market but also provides investors with diverse choices.

Investment Prospects in the Singapore Real Estate Market
The investment prospects in the Singapore real estate market can be analyzed from three perspectives: industrial property market, residential market, and retail business:

1.Investment Prospects in the Industrial Property Market
The industrial property market continued its growth momentum in the first quarter of 2023, with overall industrial real estate prices and rents rising for the tenth consecutive quarter. The demand for multi-user factories driven by the development of Industry 4.0 has pushed up rental growth for these properties. However, due to increased supply, occupancy rates have declined slightly, and rental growth for multi-user factories is expected to slow to 3-5%.

2.Investment Opportunities in the Residential Market
The Singapore residential market was suppressed by rising costs and interest rates in 2023, but recent new sales performance has shown signs of buyer confidence returning. While new home sales declined in 2023, it is expected that new home supply will remain stable in 2024, with sales expected to reach 7,000-8,000 units, indicating a gradual recovery in the market. Furthermore, due to the increase in additional buyer stamp duty (ABSD), demand from foreign buyers is expected to remain subdued, but local buyers may take advantage of this opportunity to enter the market.

3.Investment Opportunities in the Retail Business
After facing challenges from the pandemic, the Singapore retail business has shown strong growth momentum, providing rich opportunities for investors. The recovery of popular retail belts such as Orchard Road and the resurgence of consumer confidence indicate a bright future for the retail business. With the influx of foreign tourists and workers returning to workplaces, Singapore's retail market is expected to further prosper.

source：Industry Association

Overall, the Singapore real estate market offers diversified investment opportunities, with each segment having its specific growth drivers and challenges. When considering investments, investors should closely monitor market trends, policy changes, and economic conditions to make informed investment decisions.

Investing in Singapore REITs
The diversified nature of the Singapore real estate market provides investors with a wealth of choices, especially in the real estate investment trust (REITs) sector. Singapore's REITs market is mature and active, covering various property types including retail, residential, office, and industrial properties. These REITs typically offer stable dividend income while also presenting potential for capital appreciation.

By utilizing platforms like uSMART to invest in Singapore REITs, investors can not only tap into the growth potential of the real estate market but also diversify their investments to mitigate risks. Additionally, uSMART provides market analysis tools to help investors better understand market dynamics and make wiser investment choices. Below are some Singapore REITs supported for trading on the uSMART platform:

This diagram is provided for illustrative purposes exclusively

How to place a trade on uSMART mobile application
After logging into the uSMART SG app, click on "SG" from the top right corner of the page, then select "REITs" from the "Quick Access" section, or directly search for the desired US stock ETF code. You can then access the details page to learn about trading details and historical trends. Click on "Trade" at the bottom right corner, choose the "Buy/Sell" function, then select the quantity and validity period before submitting the order. The image-guided steps are as follows:

This diagram is provided for illustrative purposes exclusively

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