As concerns over the ongoing US-China trade war and global tariff uncertainties mount, Singapore’s property market is bracing for a slowdown in price growth. Analysts have taken a more cautious stance, with DBS revising its estimates for property price growth in 2025 to a range of 0% to 1%, down from the previous forecast of 1% to 2%. This downward adjustment reflects a growing apprehension about the broader economic landscape and its potential impact on the property sector.
The Property Price Index has shown signs of weakening, with a 0.6% increase recorded in the first quarter of 2025. This figure marks a significant decline from the 2.3% growth observed in the previous quarter, indicating a shift in market dynamics. The slowdown in price growth is concerning for stakeholders, especially as the affordability of homes continues to be a pressing issue for many potential buyers.
Affordability in Singapore’s housing market has reached critical levels, with the average private home price-to-income ratio hitting 14.6 times in 2024. This is notably above the historical average of 13.6 times, suggesting that many residents are facing an affordability squeeze. The situation is particularly pronounced in the Outside Central Region (OCR) and Rest of Central Region (RCR), where rising prices have made homeownership increasingly elusive for average earners.
Further complicating the market is the notable decline in the proportion of Housing Development Board (HDB) upgraders opting for new launches. This segment dropped to just 22% in 2024, a stark contrast to the historical norm of 50%. The rise in new launch prices and stricter loan-to-value limits has contributed to this trend, forcing many HDB owners to reconsider their upgrading plans amid financial constraints.
The potential for higher unemployment rates adds another layer of uncertainty to the property market. While analysts predict that the impact of rising unemployment on property demand may be less severe than in previous downturns, the specter of job losses still looms large. Historical patterns suggest that property prices can decline by 20% to 40% during economic downturns, leading to concerns about how the current situation will unfold.
The combination of these factors paints a challenging picture for Singapore’s property market. Stakeholders are left to ponder the implications of the trade war and domestic economic conditions on future growth.
As the market braces for what could be the next big test, the outlook for property prices appears increasingly uncertain. Investors and homeowners alike are urged to remain vigilant, as the trajectory of the market in the coming months will be closely watched. The evolving landscape could lead to a recalibration of expectations, underscoring the need for adaptability in an ever-changing economic environment.
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News Source: Edgeprop
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