Singapore property outlook 2018 – 3 things to look out for

Singapore HDB property residential

How does the Singapore property market outlook look like in 2018?

Here are 3 things to look out for regarding Singapore’s residential market in 2018 according to Maybank Kim Eng.

Rental recovery supporting price increases

According to Maybank, the upcoming demolition of 3,000+ units sold for redevelopment/en bloc will lead to a smaller net supply of just 4,900 units in 2018.

This is likely to put downward pressure on vacancy rates.

Falling vacancy rates will then lead to a pick up in rents. The expected uptick in rents will be the first pick up after four years of decline.

Also read: Oxley’s 2017 en-bloc purchase at Potong Pasir

According to Maybank, they see median price growth in the High End (Core Central Region) at 3% in 2018, compared to growth in the Mid Range (Rest of Central Region) and Mass Market (Outside Central Region) of 4% each.

Primary and secondary  home sales of 12,000 units each will result in a total of 24,000 units transacted in 2018.

In terms of supply, there is likely going to be 18,100 HDB flats added, ahead of Executive Condominiums of 3,600 and private houses of 4,900.

Oversupply not on the horizon yet

According to some news reports, the market appears to be concerned with potential oversupply because of the increase in en-bloc deals.

The reasoning is that for every unit taken out by an en-bloc deal, there will be 3-4 replacements in the redeveloped project.

Maybank feels that despite this being a valid concern, it is too early to be worried as the redeveloped properties will not be completed till at least 2020.

Even with the completions in 2020, the average net supply of slightly over 11,000 units per year is below the 5 year average absorption rate of 13,200 units and 19,500 units that were supplied between 2014 and 2016.

Maybank sees new home sales being on track to hit 11,000 units in 2017.

Prices are now at a clear turning point and buyers who have been waiting for a price trough are likely to return to the market.

This shift in sentiment could lead to a sustained recovery in prices.

The 3,000+ owners of properties that have been en-bloced will now also need to search for new homes.

Also read: MAS trying to talk down the Singapore property market

While some may downgrade, the overall net effect of increase in demand is likely to lead to positive spillover effects on prices.

At 17,400 of unsold units in the market today, the figure is a far cry from the peak of 40,400 unsold in 2011.

In other words, there is unlikely to be an oversupply situation in the near term.

Land prices remain high

Maybank put out a report calling for a de-escalation of land prices but that has not worked.

Their earlier thesis of more stable land prices was premised on the surge in number of owners putting up their properties for sale.

This would lead to a large supply of redevelopment land. Developers would then have more choice and are unlikely to bid very bullishly.

However, land prices have continued their upward climb, albeit at a slow pace.

In the Bidarari area, land prices have been on an upward climb.

In Dec 2013, UOL bought Botanique at Bartley at $648 psf. MCC Land then bough Poiz Residence at $775 psf in mid-2014 followed by Cheung Kong purchasing Stars of Kovan at $849 psf.

There was a trough in the 2015 and 2016 period where CDL and Hong Leong bought Forest Woods at $710 psf and Evia JV bought GEM Residences at $755 psf.

Also read: This REIT has an 8.2% dividend yield

Subsequently, a pick up in prices saw UOL and UIC buying Raintree Gardens at $797 psf, SPH JV buying an Upper Serangoon plot at $1,181 psf in mid-2017 and Chip Eng Seng JV buying a Woodleigh site at $1,110 psf in mid-2017.

Thereafter in the second half of 2017, Oxley JV buying Serangoon Ville at $835 psf, KPLD and Wing Tai JV buying a Serangoon North site at $965 psf, SingHaiYi JV buying Sun Rosier at $1,325 psf and How Sun Park at $1,092 psf.

The same story appears in the East Coast area with Frasers JV buying Seaside Residences at $858 psf in Dec 2015.

This was followed by UOL purchasing 45 Amber Road in early 2017 at $1,063 psf, Sustained Land redeveloping Albracca in mid-2017 for $1,409 psf ppr, UOL and Kheng Leong redeveloping Nanak Mansion in 3Q2017 at $1,427 psf and CDL & Hong Leong buying Amber Park for $1,515 psf.

In the Orchard area, GuocoLand purchased Martin Modern at $1,239 psf in June 2016 and Selangor Dredg purchasing Draycott Park at $1,787 in June 2017.

Also read: Singapore’s residential market yield at historical lows

Roxy Pacific then bought a River Valley site at $1,582 psf in July 2017, Tiong Seng JV a site at Balmoral Road at $1,613 psf in July 2017 and Tee Land redeveloping Casa Cont at $1,638 in Oct 2017.

Finally, Frasers bought a Jiak Kim site at $1,733 psf in Nov 2017.

A full list of key land deals for 2017 can be seen below.

Maybank Key land deals Singapore en bloc property residential



  1. Dear Propertyinvestsg,

    May I know where to find the information for the excel chart above under a “full list of key land deals for 2017”?

    Would you be able to provide the same information for the previous years?


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