Singapore real estate stands strong as investors seek safe harbour

Stable government policies and a strong regulatory framework contribute to its resilience

Singapore real estate has been a bright spot in an otherwise gloomy global property market. According to a report by Reuters, the resilient industry has been able to withstand the downturn witnessed in many other countries due to government intervention in taxation and land supply management. This stability was reflected in the recent surge in real estate investment volume in Singapore, with a 73 percent quarter-on-quarter increase, amounting to USD60.7 billion, according to Singapore Business Review. 

Among the key factors contributing to the country’s attractiveness as an investment destination is its reputation as a safe haven for investors. Kristin Thorsteins, the head of partnerships – growth for APAC at IWG PLC and the chairperson of the PropertyGuru Asia Property Awards (Singapore), states that “Singapore has a stable political environment, a well-developed legal system, and a robust regulatory framework, which provides investors with a high level of certainty and security. This has made Singapore an attractive destination for both local and foreign investors looking to invest in real estate.” 

However, despite the positive outlook, the real estate investment volumes in Singapore for the first quarter of 2023 are over 40 percent lower than during the same period last year, which Thorsteins attributes to rate hikes and the deteriorating global macroeconomic situation. She adds, “I do not think this is going to get any better for the rest of 2023 as interest rates will remain high and investors would rather wait and see than enter the market right now.” 

Despite these challenges, Singapore’s strong regulatory framework and well-managed land supply have helped maintain transparency and prevent fraudulent activities. The government’s Additional Buyer’s Stamp Duty (ABSD) and Seller’s Stamp Duty (SSD) have also helped cool down the property market and encourage long-term investments. 

Moreover, the luxury condominium market in Singapore has been a silver lining, with research by JLL Australia revealing that the high-end segment has outperformed others in recent years. The report noted that this is due to the limited supply of luxury condominiums and the increasing demand from ultra-high-net-worth individuals. 

Related: The 13th PropertyGuru Asia Property Awards (Singapore) programme begins call for entries in resilient market

The demand for private homes in Singapore has also been on the rise, with new private home sales up 13.6 percent in March 2023, compared to the previous month, revealed PropertyGuru. The culmination of its awards programme, the PropertyGuru Asia Property Awards Grand Final 2022, bore witness to the best of the best Singapore has to offer, with the country taking home regional wins, led by residential developers GuocoLand [Best Luxury Developer (Asia) and Best Sustainable Developer (Asia)] and Shun Tak Holdings [Best Condo Architectural Design (Asia) for Park Nova]. The strong demand for private homes and luxury properties is expected to continue, driven by factors such as the strong economic fundamentals, a stable political environment, and high quality of life. 

Experts predict that the hospitality industry, too, is aiming to rebound to pre-pandemic levels. The Thaiger reported that the Singapore Tourism Board (STB) is leading the effort to redefine the destination, reconnect with fans, and reinvent the industry in a timely manner. Other major winning developers at the Grand Final, namely UOL Group Limited [Best Hospitality Developer (Asia) and Best Hotel Development (Asia) for Pan Pacific Orchard] and Artyzen Hospitality Group [Best Hospitality Interior Design (Asia) for Artyzen Singapore] have been at the helm of this drive for tourism recovery. 

Finally, investors in Singapore have been drawn to co-living properties, a trend that has been driving the growth of the property market in recent years. As reported by South China Morning Post, investors are seeking to subdivide properties and cash in on the co-living craze in this red-hot property market. 

Witnessed any award-worthy residential, commercial, or industrial projects in Singapore? Nominate them for the 13th annual PropertyGuru Asia Property Awards (Singapore) on or before 1 September 2023.  

Gynen Kyra Toriano, Digital Content Manager at PropertyGuru, wrote this article. For more information, email: [email protected].