Singapore’s property prices have been hitting all-time highs especially in between 2021 to 2022.  Similarly, Singapore’s rental index has been hitting all-time highs.  People who are hunting for a house will know that rental rates have gone up crazy high in 2022 where rental renewal prices could go up by 40% from 2 years ago.  This is despite the global stock market 23% slump in 2022.  Why has our property market continued to rise in the face of a global downturn?  In this article, I will explain why this is happening…

Private condo inventory at around all-time lows

The unsold inventory of condo as of quarter 3 of 2022 stood at 17,737 units.  For context, the unsold inventory was around 35,000 units back in 2019 and the annual new condo demand averaged at 10,000 units a year.  Normally, it takes 3 years for a new condo to be built and it is healthy to maintain an inventory supply that is 3 times the annual demand.  Therefore, an unsold inventory of 30,000 units is healthy.  The current inventory is 1.7 times of annual demand.  This means that there are less units available on the market than there are buyers looking to purchase them, leading to higher prices.

Given also that this inventory supply comprises mainly the expensive condos in prime district. There is not much supply for the outside central district.  With such a low supply inventory, it is no wonder that the 2021-2022 new condo launches are sold out at the rate of over 90% in day one.  In Pasir Ris 8 condo launch, the developer makes 6 price increases within the day – a unit was sold for $1.13m in the morning and a similar unit was sold for $1.26m in the evening, almost a 12% price increase within the same day.

While the annual demand for new condo units has not changed in the last 3 years, the supply of new condo did reduce.  There was a slower release of lands during the covid period.  Starting from 2020, the government has slowed down the release of land.  This is in anticipation of an economic slowdown brought about by the pandemic.  Over the past 3 years from 2020 to 2022, the government has released sufficient land to build around 10k units of condo.  For context, the annual land release pre-covid was sufficient to build an average of 10k condo units.  This means a 67% decrease in the supply of land for new condo in the last 3 years.  As land is the key raw material for building condo – without land, developers are unable to increase the supply of condo.

Application rate for public housing (HDB) has doubled
New public housing also showed a demand that is higher than supply.  From 2011 to 2019, the first-timer build-to-order (BTO) application was around 2 times.  This means that for every available unit of HDB new BTO flat, two persons applied for it.  However, from 2020 to 2022, the first-timer application rate jumped up to an average of 4-5 times.  We can see a doubling of the application rate of first timers.

BTO means a build-to-order scheme for public housing where it takes 4-5 years to build and fulfil the orders.  In response to the increase in demand, HDB has increased the BTO units in November 2022 to 10,000 units.  However, due to the construction lead time, the actual supply will only hit the market in 4-5 years time.

Rentals at all-time high

Construction Delays

The condo supply condition is further exacerbated by the covid 19 situation where construction delays resulted in construction time extended from 3 years to around 4.5 years.  This means that buyers will have to wait a longer time for their condo to be ready and in the meantime, they will rely on the rental market.

Demand for larger housing – one unexpected side effect of the covid was the increase in demand for housing space as people started to convert their residential into home offices.  Roommates that squeeze into 1 bedroom units want to have a room by themselves, hose staying in 1 bedroom units are moving to 2 bedroom, and people who are staying in 2 bedrooms are moving into 3 bedrooms, and so on.

Wealth Migration From Foreign Investors

One of the main reasons why Singapore’s property market is still going up despite the global downturn, is the wealth migration to Singapore.  Despite a 30% property tax for foreigners, foreigners are still buying Singapore’s property.  Singapore has over last 30 years strategised itself to become the safe haven country in the Asia region, or the Switzerland of Asia.  The safe haven effect is muted during peacetime but during times of turmoil or times of geopolitical uncertainty, the safe haven effect shines.  Due to escalating tensions and geopolitical uncertainty in the Greater China region over the past 3 years, some wealth is migrating to Singapore for security and contingency plans.

An indication of the wealth migration is the number of family offices that are set up in Singapore.  Family offices require a minimum of $10million and these are the vehicles for the wealthy to manage their assets.  Family offices in Singapore jumped five-fold from 2017 to 2019 and reached 400 family offices by end 2020.  It almost double again to 700 family offices by 2021.  In the first 4 months of 2022, MAS approved another 100 family offices. x

From the millionaire migration chart for 2022, Singapore is among the top 3, gaining 2,800 high net worth individuals in the year.

Strong Singapore dollar

The Singapore dollar has proven to be a stable currency.  In the year of 2022 when US dollar tightens, the Singapore dollar has only depreciated 4% against the US dollar.  SGD’s performance is relatively strong compared to the over 20% drop for Japan Yen and the British Pound hitting an all-time low against USD.  A strong SGD is also attributable to a strong SGD policy by the Monetary Authority of Singapore as a way to counter inflation.

The relative strength and stability of the Singapore dollar gave global investors the confidence in the wealth preservation ability of Singapore dollar-based assets.  SGD’s strength is battle-tested in the environment of high inflation, tightening USD, global economic downturn and a war in Ukraine.  The strong Singapore dollar reinforces Singapore- based assets as a safe haven asset.

No Short-Term Speculators

The implementation of the sellers’ stamp duties has rooted out short-term property speculators in Singapore.  It used to be a time in the past when the same property can be sold multiple times a day.  Since the year 2010 when the seller stamp duty was implemented, sellers have to hold the property for 3-4 years before selling to prevent taxes.  Hence, buyers have a minimum holding period of 3 years.  This helps to prevent speculation activities in the property market.


I hope this article has helped you understand why Singapore’s property market is still going strong.  The price is just the final results of many complex factors interacting with each other.  Overall, Singapore is an island country with limited property supply to be able to absorb the wealth flowing in from the bigger economies.  If regional tensions were to further escalate, we can see another big leap in the property prices given our status as a safe haven.  If you’re thinking about buying or selling properties, get in touch with us today to have an in-depth discussion.