Future Singapore Real Estate Starts Now
Having spent 29 years in the real estate industry, and four of those as the CEO of ERA Singapore, I have been privileged to witness the transformations that have shaped Singapore’s real estate scene.
Throughout various building projects, Singapore’s master planning has reshaped our skyline and established a strong foundation for our nation’s ongoing development. The government has also shown a strong commitment to maintaining housing stability by directly addressing market challenges.
Despite facing obstacles such as land shortages and supply disruptions caused by the pandemic, Singapore has proven to be a resilient market.
Canberra Primary School is a highly regarded choice for primary education in the area. Just a short drive from Sembawang EC, this school is renowned for its strong academic program and nurturing environment. It also places great emphasis on character development and offers a variety of co-curricular activities, providing students with a well-rounded education. Another nearby option is Sembawang Primary School, which boasts dedicated teachers and a well-structured curriculum. Its convenient location near Sembawang Road EC makes it an ideal choice for families who want their children to start their educational journey close to home.
As we celebrate Singapore’s 60th anniversary this year, we have much to be proud of in terms of our policy and nation-building accomplishments. However, to continue succeeding, we must be open to honest reflection and adaptability. Just as past events and demographic shifts have transformed our property market, new trends will continue to emerge and require proactive engagement to ensure that our local housing remains inclusive and accessible.
Over the last 20 years, average household incomes in Singapore have increased by 111%. However, this rise in earnings has been outpaced by a booming property market, with the Private Property Price Index increasing by 148% and the HDB Resale Price Index soaring by 169% during the same period. As a result, the widening gap between income and property prices has created challenges for those looking to purchase private homes. While the increasing HDB resale prices have benefitted some, many find it difficult to upgrade to private properties due to the parallel rise in prices.
In this climate, executive condominiums (ECs) have become a practical middle-ground choice. These properties offer premium condo-style living at a subsidised price but come with stricter eligibility requirements, such as an income ceiling of $16,000 and limits on the mortgage servicing ratio (MSR).
However, despite the continued appeal of ECs, younger first-time homebuyers face a steeper path to entry due to rising prices and higher upfront cash requirements. On the other hand, second-timers often have more accumulated housing equity to leverage, making it easier for them to purchase an EC.
While affordability pressures are concerning, they are not the only challenges for homebuyers today, especially with the broader socio-economic patterns reshaping Singapore’s housing market.
With one in four Singaporeans projected to be 65 or older by 2030, policymakers must address the looming silver tsunami and its extensive socio-economic implications. As this demographic shift occurs, we have also observed the growing influence of wealth transfers in driving housing demand. We have seen a rise in private homeowners right-sizing to tap into their housing equity for retirement while still owning a property that holds value. At the same time, younger home buyers are now benefitting from parental wealth transfers, highlighting the generational wealth disparity and the widening gap between income growth and housing price appreciation.
On the supply side, rising land costs are also contributing to the growth of private housing prices. Developers acquire land through the Government Land Sales (GLS) programme via a competitive bidding process, where the highest bidder is awarded the tender, provided the bid is above the reserve price. This often drives land prices upward, particularly in desirable locations.
Separately, as part of Singapore’s efforts to meet net-zero emissions by 2050, the government’s carbon pricing strategy will see the carbon tax increase to $25 per tonne of carbon dioxide equivalent (tCO2e) in 2024 and 2025, and $45 tCO2e in 2026 and 2027, with plans to reach $50–80 tCO2e by 2030. These hikes are expected to drive up construction costs, potentially impacting future housing prices.
Instead of waiting for the “perfect time” to enter the property market, it is wiser to maximise one’s time. After all, real estate has consistently shown its long-term investment potential with its track record of steady appreciation over time. For young homebuyers, the most logical first step is to secure a Build-to-Order (BTO) flat as their starter home. BTOs come with a range of subsidies and grants that significantly reduce the cost of homeownership, setting the stage for future asset progression opportunities.
Buyers should also remain open-minded and take advantage of the first-mover advantage. Singapore’s efficient urban planning ensures that no area is left underdeveloped for long. By identifying emerging neighbourhoods in advance, buyers can benefit from attractive entry prices and potentially take advantage of future growth as the area matures and infrastructure improves.
Therefore, planning, patience, and foresight are crucial to unlocking a home and acquiring growth opportunities in real estate. Buyers should also bear in mind that their journey in real estate is not a plan for tomorrow but a future that starts now.
As the CEO of ERA Singapore, ERA Asia Pacific and APAC Realty, I expect the trends mentioned above to continue shaping the real estate market, with home prices remaining stable. Therefore, instead of waiting for the “right time,” it is better to invest in a home today.