Singapore Housing and Rental Market 2025–2040: From Super-Boom to Plateauing
Executive Summary
This report examines why Singapore’s property market, after decades of extraordinary growth, is entering a new era of plateauing rather than exponential appreciation.
Key Findings
Price Trends
Property prices rose spectacularly from the 1970s–2000s, with homes that once cost ~S$700k now valued at S$10–15M.
As of 2025, growth has slowed: URA’s private property index rose just 1.0% in 2Q2025, while HDB resale prices grew only 0.9%, the slowest since 2020.
Future baseline: only 1–2% cumulative growth between 2025 and 2040, with potential corrections.
Why the Super-Boom Won’t Repeat
Permanent cooling measures: ABSD (60% for foreigners), TDSR, and LTV caps prevent speculative surges.
Ample supply: GLS and BTO launches (100,600 flats 2021–2025) dampen scarcity premiums.
Global headwinds: U.S. protectionism, bipartisan tariffs, and reshoring reduce trade-driven income growth.
TFP collapse: Total Factor Productivity (a measure of innovation/efficiency) fell from >1.3% annually (1975–2004) to just 0.1–0.2% (2005–2024). This structural slowdown means weaker income growth and housing affordability.
Rental Outlook
URA rental index was flat in late 2024, with only a 0.4% uptick in 1Q2025. Gross yields compress to ~2.5–3%.
Expat demand is shrinking: smaller housing packages, U.S. reshoring, and tighter Chinese capital flows post-Fujian scandal.
Landed rentals face higher upkeep and stricter URA rules, making condos more attractive to tenants.
Counterarguments Addressed
Land scarcity, foreign wealth, or “booms always following busts” no longer guarantee returns.
Each surge since 2007 has been followed by deliberate policy brakes, producing a “sawtooth” pattern rather than exponential growth.
As Nobel laureate Paul Krugman warned in 1994, Asia’s growth miracle was input-driven, not efficiency-driven. Singapore’s TFP plateau today reflects that same limit.
Conclusion
Singapore remains a premier hub with strong governance. But housing has shifted from being an engine of wealth to a store of value.
Policymakers will not permit runaway appreciation when HDB resale flats already exceed S$1–1.5M.
Only extraordinary global liquidity shocks (like post-2008 QE) could cause temporary deviations, but these are not sustainable baselines.
For investors: expect lower returns and higher compliance costs. For young Singaporeans: plateauing is good news for affordability and social stability.