Unravelling Key Predictions for Singapore’s Residential Market in the Year of Snake
- By Wong Shanting
- 4 mins read
- HDB, Private Residential (Non-Landed)
- 7 Feb 2025
This article was first featured on EdgeProp Singapore and was contributed by Wong Shanting, head of ERA Research and Market Intelligence.
According to Chinese astrology, the Year of the Wood Snake in 2025 could bring about transformative energy, driving reforms ahead with a mix of tension and global shake-ups. With US President Trump taking office for a second term, we are already seeing glimpses of protectionist policies that could trigger worldwide uncertainty and sweeping changes.
But as the Chinese saying goes, “危机” or crisis is where one can find opportunities within challenging circumstances. A Trump 2.0 administration suggests that the rest of the world may be gearing up for what’s ahead, with governments and markets likely to implement measures or collaborate more closely to mitigate any potential policy changes.
Slower pace of rate cuts
Following Trump’s return to the presidency, the US Federal Reserve (Fed) reiterated its cautionary stance, signalling fewer rate cuts ahead in anticipation of rising inflation in 2025. This announcement came as no surprise, given Trump’s intention to raise trade tariffs for major economies — a move that is expected to trigger inflationary pressures in the near term.
New launches spicing up with returning buyers
For the whole of 2024, developers launched some 7,500 new homes across 24 project launches, largely concentrated in the Rest of Central Region (RCR) and Outside Central Region (OCR). In 2025, we anticipate an increase in Core Central Region (CCR) launches, balancing fresh homebuying opportunities across the island and drawing more buyers into the new home market.
This boils down to the dynamics between the new home and resale markets. Since 2023, an influx of newly completed resale homes has drawn buyers away from the new home market. These homes are in pristine condition and ready to move in, making them popular with buyers who have immediate housing needs.
Abundance of BTO flats to ease HDB resale market
HDB resale prices soared 9.7% throughout 2024, driving prices higher overall. Notably, a record 1,035 million-dollar flats were sold in 2024, more than double the 469 units sold in 2023.
Despite HDB’s commitment to offering 100,000 Build-to-Order (BTO) flats between 2021 and 2025, the market continues to grapple with a housing crunch. This has pushed some buyers towards the secondary market, where tighter resale flat supply has sent prices soaring further, particularly for those in mature locations.
In response, HDB announced plans to continue developing a stable pipeline of BTO flats between 2025 and 2027, committing to launch over 50,000 flats over this period. In the long term, the higher supply of BTO flats entering the resale market will offer more resale options. This is likely to temper the price growth of resale HDB flats, steering it towards a more sustainable and manageable pace in the long term.
Key Master Plan developments stir interest in GLS sites
Continuing its push towards decentralisation, the Government is poised to introduce significant updates to the draft Master Plan 2025 on land use. This update comes at a critical juncture, addressing the evolving needs arising from technological disruptions and the ageing population, key themes that will reshape how Singaporeans live, work and play.
For starters, we are seeing the strengthening of three economic gateways in the North, East and West regions of Singapore. The Master Plan also includes introducing additional regional centres designed to drive the development of emerging industries and support job creation.
The success of these regional centres hinges on having a workforce living close to these emerging hubs, with nearby housing developments playing a pivotal role. In recent years, we have already seen a significant ramp-up in housing supply in these locations. These include new estates in Jurong and Tengah, which are strategically planned to support the growth of the Jurong Regional Centre. Similarly, housing developments near One-North and Science Park address the imbalance between industrial spaces and residential options, creating more integrated and vibrant communities in the future.
Expect heightened policy risks with pockets of opportunities
A series of better-than-expected sales at select new home launches have sparked concerns about the possibility of the Government introducing additional cooling measures to temper market activity.
While genuine upgrader demand is evident in today’s market, with many buyers welcoming the Fed’s recent cuts as a reprieve from persistently high interest rates since 2022, affordability remains constrained by the growing price quantum of new private homes.
Buyers’ fears of another round of cooling measures may prompt them to rush into the housing market prematurely due to fear of missing out (FOMO). This FOMO mentality could also trigger unnecessary urgency, as buyers become increasingly concerned about higher cash outlays in the future due to the possibility of tighter loan conditions or higher additional buyer stamp duty rates.
Disclaimer
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