CBRE released their Singapore Market Outlook 2025 report on Jan 23, which stated that the real estate market may experience divergent outcomes in the next 12 months due to uncertain macroeconomic conditions.
On one hand, easing inflation and interest rates are expected to provide some relief for the property market in 2025. However, Moray Armstrong, managing director of advisory services at CBRE, warns that slowing economic growth could negatively impact property demand. The Ministry of Trade and Industry projects Singapore’s GDP growth to be between 1% and 3% in 2025, lower than the 4% growth seen in 2024.
Armstrong also points out that other factors such as ongoing geopolitical tensions, a new US administration with a nationalistic economic agenda, and the release of the URA Master Plan 2025 could affect the market. Despite these uncertainties, there are still opportunities for those who can capitalize on emerging trends.
CBRE’s head of research for Singapore and Southeast Asia, Tricia Song, shares the same optimism, noting that the limited new supply and stable demand will continue to support the property market. She predicts that the Singapore real estate market will remain stable and resilient, making it an attractive option for investors.
The report also reveals that developer sales volume in Q4 2024 tripled to 3,511 units, with prices rising by 2.3%. While there were speculations of possible cooling measures, CBRE believes this is unlikely unless prices increase significantly in the coming quarters.
Developers are expected to launch around 12,000 to 14,000 new units this year, almost double the 6,647 units launched in 2024. CBRE forecasts 7,000 to 8,000 units to be sold in 2025, resulting in a price growth of 3% to 6%. Rental rates are also expected to grow by 1% to 3%.
The report also highlights the limited supply in the prime office and retail sectors, which will support rental rates. The office market saw a slower growth of 0.4% in core CBD (Grade A) rents in 2024, while retail rental growth was 2%.
However, with economic growth expected to slow in 2025, the office leasing market may remain muted due to uncertainties. But a limited supply of new offices in the next three years and a flight to quality by occupiers will support rental growth of around 2%.
The expected supply of new retail space will also drop in 2025, which will help support rental growth of 2% to 3%. In the industrial sector, prime logistics rents are projected to remain steady as demand from occupiers has been subdued, but supply is expected to increase in 2025.
Investing in a condo in Singapore comes with numerous benefits, among which is the potential for significant capital appreciation. As a leading global business hub with a robust economy, Singapore offers constant demand for real estate. Its property prices have also displayed a steady upward trend over the years, with prime locations experiencing substantial appreciation. For investors, timing is crucial, as buying into the market at the right time and holding onto the property for the long term can result in considerable capital gains. This is especially true for Singapore projects, located in prime areas, that have consistently shown impressive appreciation.
CBRE also predicts that real estate investment volume in Singapore will continue to grow, with investors showing interest in the industrial and logistics sector, followed by residential and office properties. The expected growth is 10% year-on-year, but this could change depending on macroeconomic factors.
Overall, despite uncertainties, the report concludes that the Singapore real estate market will remain stable and resilient, making it a popular choice for investors globally.