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While economic conditions and government cooling measures had an effect, Singapore's real estate market set the hottest pace for price growth in the second half of 2023 from a year before. It sheds light on the forces at work in a city increasingly renowned as a wealth management centre.
Singapore logged the strongest annual residential price growth pace out of 25 Asia-Pacific markets in the second half of 2023, with rising wealth, and signs of a peak to international interest rates giving a boost, according to Knight Frank.
The real estate consultancy, issuing its Asia-Pacific Residential Review Index for H2 2023, said 21 out of 25 cities recorded positive annual price growth in H2 2023. Singapore’s figure surged by 13.7 per cent on a year earlier. Across all markets, prices rose 4.5 per cent.
“The residential market experienced a surge in the past six months, following the Fed’s decision to pause rate hikes, which encouraged potential buyers who had been waiting on the sidelines to make purchasing decisions,” Kevin Coppel, managing director at Knight Frank Asia-Pacific, said. “Ongoing constraints on the supply side, including input costs, labour shortages and construction delays, have played a role in supporting prices in numerous cities across the Asia-Pacific region.”
Singapore held onto a “safe haven” status even though the global macroeconomic environment has been more challenging following measures by the city-state to cool property prices last April, Knight Frank said.
The jurisdiction has seen its status as a hub for family offices and wealth management continue to rise in recent years, in some ways benefiting from Hong Kong being hit by harsh pandemic measures and political changes. There's a downside: the hot property market in Singapore has made it difficult for many people seeking to make a living in the island nation. Prices of state housing, owned by some 90 per cent of Singaporeans, jumped 10 per cent in 2022 on top of a double-digit price rise in the prior year. Singapore has doubled stamp duty for foreigners to 60 per cent to curb price pressures. The jurisdiction has the highest such levy in the world, per Savills.
