Singapore housing’s new balance

[SINGAPORE] Singapore’s housing market, long the bellwether of stability in Asia, is showing signs of a turning point. After years of rapid price growth, HDB resale prices are finally moderating, buoyed by a surge in new supply and a wave of flats reaching their minimum occupation period (MOP). Yet, beneath this reassuring surface, the private property sector is fragmenting into a “two-speed” market: resilient demand for mass-market homes contrasts sharply with a luxury segment stifled by policy and global headwinds. As policymakers and buyers alike recalibrate, the question is not just whether prices will cool, but whether the new equilibrium will prove sustainable—or expose new fault lines.

The Supply Surge: Why HDB Resale Prices Are Cooling

The most significant shift in Singapore’s public housing landscape is the visible easing of HDB resale price growth. In Q1 2025, prices rose just 1.6%—the slowest increase in over a year and a marked deceleration from previous quarters. This moderation is not accidental. It is the product of deliberate policy: the government has ramped up the launch of Build-to-Order (BTO) flats, with 19,600 new units planned for 2025 and a total of over 102,000 between 2021 and 2025, exceeding earlier commitments.

Crucially, the pipeline is set to remain robust, with another 50,000 BTO flats scheduled between 2025 and 2027. At the same time, the number of flats reaching their five-year MOP—a prerequisite for resale—will rise, easing the tightness that previously fueled price surges. Minister for National Development Chee Hong Tat has signaled that this influx should bring further moderation from 2026 onwards, as more resale units hit the market.

Transaction data supports this narrative: while Q1 2025 saw a 2.6% quarter-on-quarter rise in resale transactions, year-on-year sales were down 6.8%, reflecting both increased buyer choice and a more balanced market. Analysts now expect HDB resale price growth to remain in the 3–7% range for 2025, a far cry from the double-digit gains of recent years.

Private Property: A Tale of Two Markets

While public housing finds its footing, Singapore’s private property sector is running at two distinct speeds. The mass-market suburban segment, driven by local demand and capital unlocked from HDB gains, continues to see robust activity. In contrast, the luxury condo market—once a magnet for foreign capital—has lost momentum.

This divergence is rooted in policy. In 2023, Singapore doubled the Additional Buyer’s Stamp Duty (ABSD) for foreign buyers to 60%, effectively cooling the high-end segment and reducing speculative inflows. As a result, luxury condo prices have risen just 19% over the past five years, compared to a 46% surge for mass-market homes. New private home sales have also slowed, with April 2025 transactions dipping to 663 units, down from 729 in March, largely due to a glut of high-end, city-centre units that struggle to attract local buyers.

Yet, the mass-market segment tells a different story. Launches in suburban areas have posted take-up rates as high as 90–95%, reflecting strong underlying demand. This resilience is closely linked to the HDB market: as resale flat values climb, many Singaporeans are able to upgrade, fueling demand for entry-level private homes.

Forecasts for private home price growth in 2025 vary—Savills projects up to 7%, while Bloomberg Intelligence expects a more modest 3%. But the consensus is clear: the private market is no longer monolithic, and its fortunes increasingly depend on policy, global capital flows, and the health of the broader economy.

Economic Undercurrents and Policy Watchpoints

The moderation in housing prices comes against a backdrop of shifting economic fundamentals. Singapore’s unemployment rate ticked up to 2.1% in Q1 2025, the highest in a year, as global trade tensions and slower employment growth weigh on sentiment. While median household incomes continue to rise—up 1.4% in real terms in 2024—the pace has slowed, and business confidence has turned more cautious.

Government policy remains the key stabilizer. The temporary 15-month wait-out period for private property owners seeking to buy HDB resale flats, introduced to curb speculative demand, may soon be reviewed or lifted as price pressures abate. Meanwhile, the continued rollout of new BTO projects, shorter waiting times for first-timers, and targeted grants for families and vulnerable groups all reflect a commitment to keeping homeownership accessible and equitable.

Yet, risks remain. The shrinking pool of flats reaching MOP in 2025—just 6,974, the lowest in over a decade—could limit supply-side relief in the short term, especially for sought-after locations. And while Singapore’s housing model has proven resilient, the “two-speed” private market raises questions about inclusivity and long-term affordability, particularly if global capital returns or local income growth stalls.

What We Think

Singapore’s housing market is entering a new era of moderation, but not stasis. The government’s proactive supply measures are finally bearing fruit, cooling HDB resale prices and restoring balance for first-time buyers. Yet, the split in the private sector—between resilient mass-market demand and a subdued luxury segment—signals deeper structural shifts that cannot be ignored. Policymakers must remain nimble, ready to recalibrate as new data emerges and global conditions evolve. For industry professionals and policy observers, the lesson is clear: stability is not self-sustaining. It is the product of constant vigilance, adaptive policy, and a willingness to confront new divides before they become entrenched.