From the fundamentals, Singapore has inherent scarcity of land arises from her small geographical size of only 720 square kilometres. As land is a precious resource, the use of land has to be carefully planned. In Singapore, the Urban Redevelopment Authority (URA) carries out strategic planning through the Concept Plan & Master Plan to ensure efficient use of Singapore’s land over time. Other important uses such as for industrial, commercial and tourism purposes have to be factored in too.
When comes to Singapore real estate market, there are several indispensable segments: residential market, office market, retail market, industrial market, and investment sales market. The movement of each of them is driven by different segment of demand.
- Residential market: among them, residential market is the one that has the most significant impact directly on the living of the public than the rest. This market is heavily driven by government policy.
- Office, retail and industrial market(commercial market): the lease and sales activities in office, industrial and retail markets are closely relevant to the economy sentiment. JTC corporation and major private developers are the giant players and can also influence the performance.
- Investment sales market: in the investment sales market, Singapore government land sale plays an important role in public sector. The developer who is successfully awarded the tender can accordingly build and launch their projects on the land for residential, official, retail, industrial function or mixed-use. However, activities in private sector contribute more to the overall real estate investment sales from the historical point of view. For property investment companies and public-listing Real Estate Investment Trusts (REITs) are very active and have frequently involved in the transaction of shopping malls, hotels and mixed-used developments.
Urban Redevelopment Authority (URA)’s Private Residential Property Price Index (PPI) is an authoritative index to reflect the movement of property market.
Singapore property market have enjoyed an upswing trend and hit a historical high before Asian Financial Crisis in 1997 with the rapid development of economy, household income, foreign buying interest and other catalytic factors.
However, the Asian Financial Crisis plunged a large decline in both prices and transactions and property price index dropped 45% below its 1996 peak. The government had made a series of warming measures like removing additional stamp duties and offering Deferred Payment Scheme (DPS) to support the market and got some recovery by 2000.
Unexpectedly Singapore property market declined again after the collapse of the dot-com bubble in 2001, the September 2001 terrorist attack and the 2003 SARS crisis. These events prompted the government to lift the capital gains tax and to allow foreigners access to Singapore dollar property loans, and also raise Loan-to-Value (LTV) limit and reduce the cash component of down payment. Meanwhile, immigration policy is very supportive for new immigrants. Property developers were allowed to take more time to complete projects. What’s more, the government had approved to build two integrated resorts to cater the international travelers and businessman. These measures aided the recovery in the property market. Good news also comes along, there is robust global growth after SARS and more and more foreign capital flows into Singapore as well.
Thus, property prices rose about 36% to another peak in 2008, led by the high-end segment of the property market and supported more broadly by demand from new immigrants. There was, however, also evidence of short-term speculative demand. Against this backdrop, the stamp duty concession was withdrawn in December 2006 and buyers were required to pay the stamp duty within 14 days of accepting their Option-To-Purchase (OTP). Then DPS was withdrawn in October 2007.
To our surprise, the external environment deteriorated and the US sub-prime crisis induced a new round of Global Financial Crisis in 2008 occurred and made a heavy hit on the Singapore property market. The price index declined by about 25% from its peak in 2008, and transaction activity dramatically became slow. In response, the government suspended the supply of land to developers and allowed them to phase the construction and sale of their projects. The US government imposed a series of quantitative easing and interest rate has fallen to a lower level since then. The low loan interest rate and free inflow of foreign capital push the property market to strongly recover after Q2 2009. A new uptrend of property market got started and set up the new high record and has lasted by the end of 2013.
From the recovery in 2009, the government imposed a series of cooling measures to announced measures to keep a healthy and sustainable property market. The market has grown steadily and resiliently after each round of the moderation polices. There are total 8 rounds of cooling measures including additional buyer stamp duty, seller stamp duty, tightening Loan-to-Value limits, loan tenure, reducing Mortgage Servicing Ratio for HDB flats, raising minimum cash down payment. for private properties, and latest Total Debt Servicing Ratio framework in June 2013. After the peak in 2013, the property market has experienced 3 years of well-controlled adjustments with a slow and sustainable downtrend till the year of 2016.
The Singapore property market is now at the historical high with almost stagnant price movement and less transaction volumes for both public and private residential properties. What’s the next trend of market? It unavoidably depends on the changes of two major factors. The first category factor is about the economy prospective, and demand and supply, the second one is all about the policies imposed on property market, such as the movement of interest rate, mortgage loan restrictions, and additional stamp duties.
There are two parallel-developed residential markets in Singapore, both heavily driven by government policy. The first segment is public housing provided by the Housing Development Board (HDB). The HDB play the vital role in creating affordable, quality housing and encouraging vibrant towns and cohesive communities. By the end of 2012, there are one million HDB flats hold around 76.3% of the overall household population according to Singapore Department of Statistics. Besides, HDB also offers subsidized apartments for sale under strict conditions of eligibility and restrictions on the resale market. For instance, from Aug 2010 onwards, all the HDB owners must fulfill the 5-year Minimum Occupation Period (MOP) before they can sell their flats in the open market.
The second segment is private residential properties accounting for a minority of entire household, up to 20%. Private property provides exclusivity and unique features and facilities that public housing don’t. It therefore represents luxury and high status of its households and becomes highly sought after. Landed and non-landed or private flats are the two types of private properties in Singapore.
Non-landed properties are apartments and condominiums. Both of them are strata-titled properties in which owners own the airspace exclusively and have a certain percentage share in the common property such as swimming pools, gardens, function room, playground etc.
How to differentiate condominiums from apartments? First a condominium property should have a land area of at least 4,000 sqm, while an apartment one does not. Second, condominiums have common facilities while apartments do not. Thirdly, condominium owners have the title of condominium while apartment ones do not. Nevertheless, foreigners are eligible to buy either condominium or apartment units. By the end of 2012, some 16.8% of households live in private residential flats.
Landed properties include Good Class Bungalows, Bungalows or Detached, Semi-detached, Terrace, Cluster houses and Townhouses. There are only 58 designated landed housing areas in Singapore. Landed properties are considered restricted properties and subject to the approval of Land Dealings (Approval) Unit of Singapore Land Authority for any non-Singaporean buyer. This is called imposed restrictions on foreign ownership of private residential property governed by the Residential Property Act (the Act). Some 5.6% of households live in landed houses by the year of 2012.
Commercial Property Market
As an important financial and commercial hub, Singapore’s commercial property market is very dynamic and supportive. Singapore is an export-oriented economy that relies heavily on diversified manufacturing and highly-developed service industries outputs to generate its economic growth. The economic activities in the key sectors create significant demand for commercial real estate.
In Singapore, the government is the main source of supply of development lands. The public sector share in commercial real estate is relatively small and private developers, especially the major players like Capitaland, Far East, City Developments, UOL and Frasers Centrepoint and so on are the main suppliers of commercial real estate space. They operate in an open and free market environment and are involved in a full range of development activities from land purchase, design and construction, financing and leasing activities.
Commercial real estate developers typically employ one of two strategies.
First, developers usually adopt a “build and hold” strategy for prime-grade commercial properties, especially office buildings in central business districts and shopping malls along the tourist belt. These properties provide a steady stream of rental income and are held in developers’ portfolios for long-term investment purposes. With the emergence of REITs in Singapore after July 2002, many developers sold their investment-grade investment properties to REITs.
The second strategy involves “build and sales” of strata-titled commercial space, alike condominium projects. Strata-titled space includes subdivided units and floors in commercial buildings that are sold separately to individual owners. Investors or space users who purchase undivided commercial space are issued strata-titles for the space, which are coupled with joint ownership rights of the land on which the property is annexed. Strata-title owners cannot sell joint interests in the land separately unless a resolution of a majority of owners is obtained. The strata-commercial market is relatively small compared to prime –grade commercial properties held in developers’ and/or REITs’ portfolios.
Unlike the residential properties, the transactions volume for both prime-graded building and strata-titled commercial property is much smaller although the overall transaction sales may be much higher. Currently, URA regularly publishes some key indices, for four commercial submarkets: offices, shops, multiple-user factories, and multiple-user warehouse.
Industrial Property Market
Singapore industrial properties are vital for development of diversified and dynamic industries in such a small city country with land scarcity. Industrial property market is strictly under the regulatory conditions imposed by the Government for both the demand and the supply sides.
There several types of industrial property in Singapore, which include factory, warehouse and business park. Both factory and warehouse space can comprise either single-user or multiple-users. Business Park space includes Science Parks and caters to high-technology and R&D activities.
The industrial property market in Singapore is a distinct geographic market from the rest of the world. In Singapore, there are six main areas in which industrial property is aggregated–Jurong/Tuas, Alexandra/Bukit Merah, Paya Lebar/Ubi/Kaki Bukit, Changi/Loyang, Ang Mo Kio/Serangoon North and Woodlands/Kranji/Yishun.
According to Colliers International in Q1 2012, of the total industrial space in Singapore (38.6 million sqm), about 60% of it was held directly by end-users, who could be both SMEs and MNCs. Industrial REITs, as a whole, had about 16.2% of all industrial space. Jurong Town Corporation (JTC) and HDB as the major public sector, had around a total 14% of all industrial space. The market shares of the individual players was around 11%.
Industrial properties in Singapore are categorized under Business 1 (B1) or Business 2 (B2) zoning by the authorities. Developments classified under B1 use are meant for light and clean trades which are non-polluting. Such developments are usually found within housing estates. The polluting and general trades are put in industrial developments zoned for B2 uses and they are located in the sub-urban areas.
Tenure for industrial strata-titled developments can be either freehold or leasehold. The majority of strata-titled developments are however built on Government Land Sales(GLS) sites, with tenure ranging from 30 to 60 years. For more information about Singapore industrial properties, you can visit the local property portal Commercialguru.com.sg.
When the real estate market moves, you may want to know where to find the timely update and latest information. Actually you have more accessibility to the market data now than before thanks to the transparency of Singapore market and the advancement of Internet technology. The following are some public authorities and private consultancies that provide a great number of free or paid services for property market update, review and forecast.
1. Housing Development Board (HDB) website: as the largest housing developer, HDB can provide you free e-service with the accurate information on the prevailing trends in the HDB resale market. This e-service enables you to check past 1-year resale transacted prices
If you are a potential resale flat buyer or seller, you must refer to the e-service timely to make informed decisions. Check the HDB e-service of resale price now.
2. Urban Redevelopment Authority (URA) website: as Singapore’s land use planning and conservation authority, URA has the strongest voice in private property market. URA provides you with both free and subscribed services about island-wide private residential, commercial and industrial properties.
For the convenience of the public, URA offers quite a few of free services of timely information on private property market. Based on them, you can get
- the details of private residential properties and executive condominiums sold with caveats lodged in the last 36 months.
- the prices, number of units launched, sold and unsold for private residential projects, including executive condominiums, by developers.
- the details of rental contracts of private residential properties and executive condominiums.
- information on new private residential projects that are being planned or under construction.
- quarter report on private real estate statistics: it cover the island-wide trends of prices, rentals, vacancy, supply and stock of private residential, commercial and industrial properties.
Among them, the e-service of Market Information with Analysis Tool is the most powerful platform to help you analyse data on the prices, units launched and sold, rentals and pipeline supply of private residential properties.
On the other hand, the professionals in real estate industry such as developers, researchers, estate agent can benefit most from URA’s subscribed services called Real Estate Information System (REALIS). REALS provides the most comprehensive and up to date information on the property market in Singapore. This is why you also can read some very insight articles and reports published online, newspapers by a group of professional researchers and consultants. The sources of figures and data should come from REALS database, which stand for the authority and credibility.
2. Singapore Real Estate Exchange (SRX) website
SRX is a real estate network powered by StreetSine and help estate agencies and salespersons to conduct real estate transactions. What’s more, potential buyers and sellers can get real-time information on the market movement for both public and private properties, just like a stock market platform for investor.
3. Square Foot Research(SFR) website: SFR is a rising star of Singapore property research. it provides you with the latest property transaction prices, rents, trends and analysis covering the whole spectrum of property market from public and private residential, to commercial and industrial, mixed developments. A highlighted point is that SFR powers STproperty.sg, a leading property online portal offer the public with a very powerful tool called Singapore Property Watch(SPW). For any project in the market, SPW can provide with the insight information such as transaction history, profitability analysis, rental history, nearby properties and more.
4. Online property portals: the beautiful combination of Internet technology and property market has successfully driven the rapid development of some giant online property portals in Singapore. Like Realtor, Zilliar, those online property portals provide a comprehensive database and real-time information on Singapore property market. They are all beneficial for property salespersons, buyers, and sellers. Among them, Propertyguru, STProperty, and iProperty are the market leaders.
5. Property researchers and consultancies
You can also learn how does the market perform by reading the articles and reports provided by property researchers and consultancies. Those professionals and institutions can be divided into two groups.
The first one is academic-oriented and they do not practice real estate transactions but undergo pure research projects. The Institute of Real Estate Studies (IRES) and Department of real estate of NUS are good examples.
The second group is dual-role players who both run real estate business and do market research. Here we just list a few of them, and you can visit their websites for more information about market updates.
- Jones Lang LaSalle(JLL): JLL is an international real estate services firm specializing in commercial and residential property management, leasing, and investment management.
- Knight Frank: Knight Frank is an integrated global real estate advisory firm providing a full suite of real estate services in both commercial and residential property markets. they offer clients all in one real estate solutions through a comprehensive range of services on all aspects of property across commercial, residential and other market sectors. Solutions are formulated and delivered by professionally qualified staff with tremendous experience in their respective fields.
- SLP International: It is a one-stop property consultant agency to deliver distinctive solutions for real estate developers, investors and owners.
- Colliers International: Colliers is a leading global real estate consultancy company offering comprehensive services to investors, property owners, tenants and developers.
- CRBE: CBRE is the world’s largest commercial real estate services firm serving owners, investors and occupiers.
- Savills: Savills is a international real estate services provider offering a broad range of specialist advisory, management and transactional services to global clients in the real estate.
- DTZ: DTZ is a global leader in property services. The company offers research and consulting services in real estate, often publish reports on global and local market knowledge, forecasting and trend analysis
- OrangeTee: it’s a Singapore property consultancy firm specializing in residential, commercial and industrial properties. The firm also research and monitor the various property markets in Singapore and the region to serve the clients better with customized solutions.
Real Estate Developers
As who is a book’s author is to make sense for you to buy it. The developers behind a property also make a difference when you consider to buy a property.
There are hundred of property developers running their business in such a very open and competitive market in Singapore. Real Estate Developers’ Association of Singapore (REDAS) Developers have a complete list of its members. The government has implemented a series of regulations to control development of real estate market. All of the developers play with the transparent rules. You can have a look at important publications by Urban Redevelopment Authority to better understand how does Singapore developers develop their real estate projects. You can also refer to Handbook for residential development and Handbook for non-residential development.
Singapore developer industry is much like a big boy playground. Given the fierce competition and the rule of law environment, the most renowned property developers in Singapore have gown to build their solid brands, increase capital pool and innovate their strategies. The following are just some examples of the major property developers.
- Far East Organization: Far East Organization is the largest private property developer in Singapore, with more than 730 developments in the residential, hospitality, retail, commercial, and industrial sectors, including 44,000 or 1 in 6 private homes in Singapore. The developments by FEO include Orchard Scotts, Eight Courtyards, Skyline @ Orchard Boulevard, The Scotts Tower, Silversea, The Clift and many more.
- City Developments Limited (CDL): CDL is one of the largest property developers in Singapore, which is leading in real estate development and investment, hotel ownership and management, facilities management and the provision of hospitality solutions. With its large land bank of over 3.2 million square feet, over 30,000 luxurious and quality homes have developed. City Square Residences, The Sail @ Marina Bay, The St. Regis Hotel and Residences, Cliveden at Grange, One Shenton, The Glyndebourne, Buckley Classique, Shelford Suites, Jewel @ Buangkok, NV Residences
- Capitaland: CapitaLand is one of Asia’s largest real estate companies which focus on its core market of Singapore and China. The company has diversified real estate portfolio primarily includes homes, offices, shopping malls, serviced residences and mixed developments. From condominiums to landed housing, CapitaLand’s homes have catered to a broad spectrum of homebuyers across all market segments. Its portfolio of homes include d’Leedon, The Nassim, The Interlace, The Seafront on Meyer, Urban Resort Condominium, Urban Suites, The Wharf Residence, Latitude, Citylights, RiverEdge and Varsity Park Condominium.
- Keppel Land Limited: Keppel Land is the child company of the Keppel Group and specialize in property development. As one of Asia’s premier property companies, Keppel Land is recognized for its sterling portfolio of award-winning residential developments and investment-grade commercial properties. Some of the famous residential projects are Marina Bay Suites, Reflections at Keppel Bay, Corals at Keppel Bay, The Luxurie, The Lakefront Residences and The Glades. The commercial building completed by Keppel Land are like Marina Bay Financial Centre (Phase 2),Equity Plaza, Keppel Bay Tower, HarbourFront Tower One and Two.
- UOL Group: UOL is one of Singapore’s established property companies, with an impressive portfolio of investment and development properties including residential apartments, offices, retail malls, hotels, spas and restaurants. A lot of residential properties have been developed by UOL. Here are some of their home project portfolio: Katong Regency, Waterbank at Dakota, Archipelago, Double Bay Residences, Duchess Residences, One Amber, Southbank, one-north residences, Newton Suites, Spottiswoode Residences, Thomson Three, and Principal Garden.
- Frasers Centrepoint: it is one of Singapore’s top property companies. With three decades in property development, investment and management, the has a total asset value of S$10.36 billion. As an integrated real estate company, Frasers Centrepoint has a wide portfolio comprising distinctive residential projects, shopping malls, offices, business space, real estate investment trusts, and serviced residences in and out of Singapore. Some of its home projects are Boathouse Residences, eCO, Eight Courtyards, Flamingo Valley, Palm Isles, Q Bay Residences, Seastrand, Waterfront Gold, Waterfront Isle, Watertown, North Park Residences.
- Wingtai: Wing Tai Holdings Limited is Singapore’s leading property developer and lifestyle company reputed for quality and design. Wing Tai’s core businesses comprise property development and investment, hospitality management and lifestyle retail. The awarded residential projects include Draycott 8, The Tomlinson, Belle Vue Residences, Helios Residences, L’VIV, Ascentia Sky, The Riverine By The Park.