In the past 10 years, Singapore has grown and changed in myriad ways. The population of the city state has increased by more than 12 per cent, from 5.08 million1 in mid-2010 to 5.7 million by the middle of 2019. At the same time, the nation’s nominal per capita GDP has grown 41 per cent, from S$64,408 in 2010 to S$90,787 as of June 2019. Following the 2008 subprime crisis, the economy has seen a decade of relative calm.

The Singapore property market, on the other hand, has had a fairly eventful decade. A bullish post-2008 surge in private property prices in Singapore was put to a stop by the implementation of additional curbs in 2013, and then again most recently in 2018. As Chinese developers jostled into the market, this bullish sentiment and keen interest from foreign buyers fuelled a similar response from locals who feared that it was a period of buy-now-or-never, as PropertyGuru’s 2H 2018 Consumer Sentiment Survey results showed.

Looking back on en bloc fevers and cooling measures, it is important to note that the rise of property values in the past decade was not driven solely by perception or speculation, but also by tangible fundamentals. An increase in national population, economic growth and deliberate, far-sighted urban plans catalysed the development and rejuvenation of numerous locations within the city-state.

Singapore’s infrastructure has also changed over the past decade. At the start of 2010, there were only 77 Mass Rapid Transit (MRT) stations (excluding Light Rail Transit or LRT stations). By the end of 2019, 145 stations4 will be operational, with PropertyGuru looks ahead to 2020 and the coming decade with optimism anchored in prudence. the latest being Woodlands North and Woodlands South—the first stations on the Thomson-East Coast Line (TEL). With the TEL, Jurong Region Line, Cross Island Line and the ‘closing of the loop’ for the Circle Line, a ‘car-lite’, highly connected city is taking shape.

Public transport improvements over the past decade have had a positive impact on the Singapore property market. New MRT stations will open up new areas of potential growth such as Paya Lebar and Jurong East, as greater MRT accessibility and rail capacity bring forth more amenities and new residential developments. The upside is not just from a dollar value perspective but also from a liveability standpoint.

From a supply perspective, this has also been the decade of overhang for private residential real estate. “This has resulted due to the exuberance of the property market during this period, which is a byproduct of a sustained economic growth,” said Tan Tee Khoon, Country ManagerSingapore, PropertyGuru. “Bearing this in mind, the increase in supply of vacant properties over the decade isn’t necessarily a bad thing as long as, on an individual level, buyers remain realistic, exercise good judgment and borrow within their means.”

With the abundant supply of private housing, prices are nonetheless expected to hold steady as developers see little leeway for adjustment given the high breakeven price paid for land purchased before the July 2018 cooling measures. PropertyGuru shares developers’ concern regarding demand in the short term. However, it is confident that there will be a gradual absorption of supply over the next five years.

With intervening measures by the Singapore government, the property market has seen through the decade without major ill effects, such as a runaway housing bubble. Going ahead, trends such as smaller household sizes and concepts such as co-living could possibly stimulate housing supply uptake in addition to population increase and economic growth.

In summary, for the Singapore property market, PropertyGuru looks ahead to 2020 and the coming decade with optimism anchored in prudence. Here are five key highlights from their annual report:

1. City fringe, known as the Rest of Central Region (RCR) in Singapore, is expected to shine bright

– Properties in the city fringe (also known as RCR) may benefit from “the confluence of demand from various buyer groups, including foreigners looking for a good buy and Singaporean investors and owner-occupiers who want to live closer to the city”.

– “In 2019, a newly launched city fringe condo is, in the eyes of your typical buyer, seen as ‘more worth it’ than a resale property in the city or in a prime district,” explained Tee Khoon.

– New launches in this region, which in the past four quarters, accounted for roughly half (47.5%) of all new launches—despite it only occupying 15% of Singapore’s land area.

– Strategic growth areas and infrastructural developments will augment the intrinsic locational advantage of city fringe properties.

– In the coming year and decade, PropertyGuru foresees the positioning of RCR projects to change as upscale developments spill over from the Core Central Region (CCR) and its prime districts to the RCR.

2. New mature estate flats unlikely to dent resale demand

– In the public housing market, flat buyers can expect more BTO launches from HDB in mature estates.

– The HDB has already revealed it will build 5,000 BTO flats in Queenstown by 2027 and another 1,500 units in Bishan. These are highly popular locations and will likely be several times oversubscribed.

– However, PropertyGuru does not expect demand for mature estate resale flats, especially those with good locational attributes, to fall. Supporting our view is the recently increased grant amount for resale flats, which gives sellers more leverage in their asking prices.

– As for the HDB resale market, BTO launches in mature estates could also help to make HDB resale flats more affordable, due to greater competition and the presence of new grants such as the Enhanced Housing Grant.

– The higher income ceiling for BTO flats and ECs means there will be a new pool of demand for public housing.

3. District 15, Singapore’s original waterfront district set to shine

– With its laid-back charm, access to good food, heritage precincts and proximity to established schools and the East Coast Park, District 15 is Singapore’s original waterfront district.

– Its asking price was $1,673 psf in the third quarter of 2019 compared to $1,473 psf in the fourth quarter of 2016—a growth of 15%. Compared with the rest of the districts in the RCR, District 15 ranks third after Districts 18 and 3.

– With the TEL set to open in stages in 2023 and 2024 respectively, we can expect the potential spillover effect from the MRT line to be keenly felt in District 15, from the residential enclave of Tanjong Rhu all the way to Bayshore, Bedok South and Sungei Bedok in neighbouring District 16.

– For Bayshore, URA has put in place plans to build a “vibrant and sustainable garden neighbourhood”.

– With Greater Southern Waterfront areas still “Subject to Detailed Planning” under the URA Masterplan 2019—it appears that Bayshore will be the more immediate waterfront project that property watchers should look out for.

4. Buoyant foreign buying to continue

– The Singapore luxury market has performed well above expectations in 2019. This is expected to continue next year, as new launches hit the market, intense competition among developers result in lucrative price points and high-end properties.

– “We will continue to see an inflow of foreign buyers in the Singapore luxury market. Investors see Singapore as a safe and stable country for wealth preservation via real estate,” said Tee Khoon.

– Especially in the ultra-luxury market with properties in the price range of $10 million and above, interest from Chinese national buyers is expected to continue.

5. Macroeconomic concerns need to be answered

– Despite many positives in the market, possible roadblocks in the form of muted economic growth and a possible US-China trade war that could dampen home buying sentiment.

– Of greater concern is affordability of housing beyond HDB flats: What needs to improve is wage growth, which needs to keep up with property price increase to remain affordable for aspirational home buyers and facilitate upward mobility of Singaporeans who want to upgrade from HDB flats to condos.

– In the past three years, while median asking prices of private property in Singapore increased by 12 percent, gross monthly income from work has only increased by 7 to 8 percent.

– With GDP growth projections subdued for the year ahead and possible headwinds, it remains to be seen if the affordability gap for private homes will widen for Singaporeans.