Unravelling Key Predictions Singapore%E2%80%99S Residential Market Year Snake
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According to Chinese astrology, the Year of the Wood Snake in 2025 is expected to bring transformative energy, with potential global shake-ups and tensions driving major reforms. As the second term of US President Trump commences, there are already indications of protectionist policies that could cause uncertainty and significant changes worldwide.
However, as the Chinese saying goes, “��机” or crisis can also bring opportunities, if one knows how to navigate difficult circumstances. With a Trump 2.0 administration in place, the rest of the world may be preparing for potential changes, as governments and markets work together to mitigate any potential policy shifts.
These developments may have a direct impact on Singapore’s open economy, which heavily relies on global trade and external supply chains. The residential property market could see increased interest rates and higher construction costs, potentially driving up home prices. Despite this, with a deeper understanding of market dynamics, homebuyers may still be able to discover hidden investment opportunities amidst the uncertainty.
As we enter the Year of the Snake, like the animal itself, we must approach the property market with patience and precision in order to uncover potential opportunities. Here are our “S-N-A-K-E” property trends and predictions for 2025.
Slower pace of rate cuts
Following Trump’s re-election, the US Federal Reserve (Fed) has reiterated its cautious stance, signaling fewer rate cuts in anticipation of rising inflation in 2025. This was not unexpected, given Trump’s plans to raise trade tariffs for major economies, which could lead to inflationary pressures in the near future.
In 2024, we saw how a series of rate cuts boosted buyers’ confidence in the residential market, resulting in increased market activity in the fourth quarter. With 2025 now underway, the pace of rate cuts is expected to be more measured. By the end of 2025, Fed rates are projected to reach around 4%, compared to the earlier projected 2.9% when rate cuts were first implemented in September 2024. However, these rates are still lower than the peak of 5.33% seen in August 2023.
New launches to attract returning buyers
In 2024, developers launched approximately 7,500 new homes across 24 projects, mainly in the Rest of Central Region (RCR) and Outside Central Region (OCR). In 2025, we expect to see an increase in launches in the Core Central Region (CCR), providing fresh opportunities for homebuyers across the island and drawing more buyers into the new home market.
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This is due to the dynamics between the new home and resale markets. Since 2023, the influx of newly completed resale homes has drawn buyers away from the new home market, as these units are in move-in condition and attract buyers with immediate housing needs. However, with a decrease in the number of completions from 10,600 units in 2024 to approximately 5,800 private homes in 2025, the resale and sub-sale market could become tighter. As a result, buyers may be more inclined to explore the new home market instead.
Abundance of BTO flats to ease HDB resale market
In 2024, the biggest beneficiaries of the residential market were HDB flat owners, who saw the value of their homes increase. HDB resale prices rose by 9.7% throughout the year, driving up overall prices. Notably, a record number of 1,035 million-dollar flats were sold in 2024, more than double the 469 units in 2023.
Despite HDB’s commitment to offering 100,000 Build-To-Order (BTO) flats between 2021 and 2025, the market continues to face a housing crunch. As a result, some buyers have turned to the secondary market, where the limited supply has led to higher prices, especially in mature locations.
In response to this, HDB announced plans to release over 50,000 BTO flats between 2025 and 2027, providing more options for resale buyers. This is likely to moderate the price growth of resale HDB flats and maintain a more sustainable and manageable pace in the long run. With more BTO flats entering the market, 2025 may be a favourable year for first-time buyers to secure their dream home.
Key Master Plan developments to spark interest in GLS sites
The Singapore Government is expected to introduce significant updates to the draft Master Plan 2025 on land use, addressing the evolving needs arising from technological disruptions and an ageing population. Three economic gateways in the North, East, and West regions will be strengthened, and additional regional centres will be established to support job creation and the growth of emerging industries.
The success of these regional centres relies on having a workforce living nearby, with housing developments playing a crucial role. In recent years, there has been a significant increase in housing supply in these locations, such as Jurong and Tengah, which have been strategically planned to support the growth of the Jurong Regional Centre. Similarly, housing developments near One-North and Science Park aim to create more integrated and vibrant communities by addressing the imbalance between industrial spaces and residential options.
As such, we anticipate developers to show a keen interest in housing plots in these growth areas. For savvy investors willing to look beyond current underdeveloped areas, this presents an opportunity to enter markets with long-term growth potential.
Heightened policy risks with potential opportunities
The recent better-than-expected sales at select new home launches have raised concerns about the possibility of the Government implementing additional cooling measures to temper market activity. While there is genuine demand from upgraders in the market, affordability remains a concern, as the price of new private homes continues to rise.
Buyers’ fears of cooling measures may lead to premature purchases, driven by a fear of missing out (Fomo). This could also create a sense of urgency, as buyers rush to secure a property before potential tightening of loan conditions or higher additional buyer stamp duty rates.
Despite these concerns, falling interest rates since late 2024, coupled with expected rent increases, may lead to rising property values. These factors suggest a potential recovery for Singapore’s residential property market and the discovery of hidden opportunities in the coming months.
Ultimately, buyers must stay agile and discerning, like the flexible snake, to seize opportunities in an evolving property landscape.