Singapore Housing Market Defies Global Downturn And Curbs Amid Soaring Rents

The growth in Singapore home prices accelerated to 3.8% in the third quarter to record levels, after rising 3.5% in the previous three months, as soaring rents continued to attract buyers despite recent measures introduced by the government to rein in skyrocketing prices.

“Price growth may continue but at a slower pace after the new cooling measures,” Christine Sun, senior vice president of research at real estate broker OrangeTee & Tie, said by email.

Singapore home prices will increase as much as 11% for the whole of this year, after rising 10.6% in 2021, Sun said. The outlook for 2023 is less rosy, with prices likely rising at a slower pace of up to 8% amid higher mortgage rates and heightened risks of a global economic slowdown, she added.

Surging home prices in the city-state contrast with declining property prices in other major markets, such as Hong Kong and the U.S. Despite rising interest rates, demand for Singapore homes has been resilient, buoyed by strong household income, a tight domestic labor market and a low level of housing inventory.

With housing inventory across the island nation near its lowest level in five years, home rents have been rising. Rents for landed properties jumped 10.9% in the third quarter compared to the previous quarter, while those for residential condominiums and apartments increased 8.3%, data released by the Urban Redevelopment Authority on Friday showed. “For investors and landlords, surging rents are still cushioning the impact of higher mortgage payments,” Sun said.

While home sales volume dropped 9.7% to 6,148 units in the third quarter, several new launches saw robust demand, with AMO Residences—a 372-unit condominium project being developed by billionaire Wee Cho Yaw’s UOL Group in the central Singapore town of Ang Mo Kio—selling 98% of the project during its weekend launch in July. Lentor Modern, which is being developed by Malaysian billionaire Quek Leng Chan’s Guocoland, and Sky Eden@Bedok, a project of Thai billionaire Charoen Sirivadhanabhakdi’s Frasers Property, also saw brisk sales.

Home sales for projects launched in October were also off to a good start. Copen Grand—a 639-unit executive condominium (EC) project which is being jointly developed by City Developments with Hongkong Land unit MCL Land in the western part of Singapore—sold 73% of the units during the weekend launch. “The strong EC demand is mainly driven by a shortage of supply in the market,” Sun said.

Copen Grand will be the first EC to rise in the upcoming western Singapore town of Tengah, which means eligible buyers can get a housing grant of up to S$30,000 ($21,000) from the government.