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Everything you need to know is included in our Singapore Property Pack
Are you considering buying real estate in the Lion City? Are you wondering whether now is the right time to make a move?
When it comes to market timing, people have varying opinions. Your friend, who has been living in Singapore, might advise you that now is the worst time to buy, whereas your real estate agent may have a different opinion.
At BambooRoutes, when we create articles or update our pack of documents related to the real estate market in Singapore, we base our work on reliable data and statistics, rather than relying on subjective opinions or hearsay.
We've done extensive research on official reports and government website statistics, resulting in a comprehensive database. Here's what we've learned, which can provide valuable insights for your decision-making process regarding real estate purchase in Singapore.
Happy reading, and let's dive in!
How is the property market in Singapore currently?
Singapore is, today, one of the most stable countries in the world
Positive
If you want to invest in real estate, prioritize stability as it ensures predictable and reliable market conditions. It is an information you need as a foreigner looking to buy a property in Singapore.
You probably already know that Singapore is incredibly stable. The last Fragile State Index reported for this country is 25.4, which extremely high.
Singapore's stability is largely attributed to its strategic economic policies that have fostered a robust, diversified economy and its strong governance framework characterized by strict rule of law and effective anti-corruption measures. Additionally, its emphasis on multicultural harmony and social cohesion has ensured internal stability in a diverse society.
Investors can definitely rely on the country's stability for investment. Let's review the economic outlook.
Singapore is poised for strong growth
Positive
Before buying a property, consider the economic well-being of the country.
According to the IMF's estimations, Singapore will, in 2024, grow by 2.1%, which indicates the country is heaidng in the right direction. As for 2025, the consensus estimate is 2.3%.
Besides that, the economy will keep growing since Singapore's economy is expected to increase by 10.8% during the next 5 years, resulting in an average GDP growth rate of 2.2%.
The expected sustainable growth rate in Singapore indicates a stable and growing economy, which can lead to increased demand for real estate and potentially higher property values. For an investor, this means a better chance of earning good returns on their real estate investment over time.
On top of that, there are other indicators to pay attention to.
Singaporean business owners are developing a stronger sense of trust in the economy
Positive
The GDP forecast is not enough to fully capture the local sentiment, as it relies solely on external projections and may overlook important factors. Thankfully, in Singapore there is a standardized metric that is regularly published. This doesn't apply to every country, so we're in luck.
By evaluating surveys and assessments of business leaders, the Business Consumer Index (BCI) is established as a metric to gauge their confidence in the current and future economic conditions.
The Statistics Singapore reports that the Business Confidence Index has reached a value of 23 for Singapore. For interpretation, this score is strong.
It's worth noting that the trend is on an upward trajectory: the BCI score, 12 months ago, recorded at 6.
In Singapore, the Business Confidence Index is currently at a strong level. This suggests a positive outlook within the business sector, reducing concerns about an imminent crash in the property market. A strong confidence score often reflects stability and optimism, which are encouraging signs in economic cycles. However, it remains important to consider other relevant indicators before deciding if it is the right time to purchase property in Singapore.
Singaporean property prices gain momentum
Positive
Singapore's home prices have increased by 35.2% in 5 years according to Urban Redevelopment Authority.
It means that if you had bought a high-rise condo in Singapore for $2,500,000 five years ago, then it would now be worth around $3,380,000.
Currently, the Singaporean property market is witnessing a notable surge in prices, with accelerated growth gaining momentum.
Certainly, it's a positive indication if you are considering purchasing a property in Singapore. The market is vibrant and showing a growing momentum. However, it might be a good idea to await a market correction in order to secure a more favorable price for your investment.
You can find a more detailed analysis of the real estate prices in our property pack for Singapore.
Everything you need to know is included in our Singapore Property Pack
Singapore's population is growing and getting richer
Positive
When you're looking to buy real estate, consider population growth and GDP per capita because
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Singapore, the average GDP per capita has changed by 9.9% over the last 5 years. It's a solid number. Furthermore, the Singaporean population is growing (+3% in 5 years).
This means that, if you purchase a high-rise condominium in Singapore and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.
If you're considering purchasing and renting it out, this trend is a good thing. Then, there might be a rise in rental demand in places like Jurong or Orchard in 2025.
Rental yields are not crazy in Singapore
Neutral
Now, let's delve into the rental yield.
It represents the annual rental income generated by a property divided by its purchase price or market value. For instance, if a property in Singapore is purchased for 1,000,000 SGD and generates 50,000 SGD in annual rental income, the rental yield would be 5%.
According to Numbeo, rental properties in Singapore offer gross rental yields ranging from 2.6% and 5.3%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Singapore.
It means that the income potential from a real estate investment is relatively moderate.
Everything you need to know is included in our Singapore Property Pack
In Singapore, inflation is expected to be minimal
Neutral
Inflation is the phenomenon where prices consistently rise.
It's when your regular plate of chicken rice costs 6 Singapore dollars instead of 5 Singapore dollars a couple of years ago.
If you're planning to invest in a property, high inflation can offer several benefits:
- Property values often increase over time, leading to potential capital appreciation.
- Inflation can lead to higher rental rates, thereby increasing the cash flow from the property.
- Inflation decreases the real value of debt, making mortgage payments more affordable.
- Real estate can serve as a hedge against inflation, safeguarding the value of the investment.
- Diversifying into real estate provides stability during periods of inflation.
According to the IMF's estimations, over the next 5 years, Singapore will have an inflation rate of 1.0%, which gives us an average yearly increase of 0.2%.
This data shows that Singapore will likely experience almost no inflation. If you buy a property now, you may experience lower appreciation potential and reduced returns on investment.
Is it a good time to buy real estate in Singapore then?
Let's wrap things up!
Singapore is, today, one of the most stable countries in the world, making it an attractive destination for property investment. The country's political stability, efficient governance, and robust legal framework provide a secure environment for investors. This stability ensures that property investments are protected and can grow steadily over time, making 2025 an ideal time to consider buying property in Singapore.
Besides that, the economy will keep growing since Singapore's economy is expected to increase by 10.8% during the next five years, resulting in an average GDP growth rate of 2.2%. This expected sustainable growth rate indicates a stable and growing economy, which can lead to increased demand for real estate and potentially higher property values. For an investor, this means a better chance of earning good returns on their real estate investment over time.
Singaporean property prices are gaining momentum, driven by a growing and increasingly affluent population. As more people move to Singapore and the existing population becomes wealthier, the demand for housing is likely to rise. This increased demand can lead to higher property prices, making it a strategic time to invest in real estate before prices climb even further.
According to Numbeo, rental properties in Singapore offer gross rental yields ranging from 2.6% to 5.3%. This makes property investment in Singapore not only a potentially lucrative venture in terms of capital appreciation but also a source of steady rental income. Additionally, with inflation expected to be minimal, the purchasing power of rental income is likely to remain stable, further enhancing the attractiveness of property investment in Singapore in 2025.
We genuinely hope this article has provided you with helpful information.. If you need to know more, you can check our our pack of documents related to the real estate market in Singapore.
-Will real estate prices go up in Singapore?
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.