Singapore’s house prices still increasing, despite falling demand

Surprisingly, Singapore’s residential property prices continue to rise robustly, despite falling demand due to new rounds of market-cooling measures. In the fourth quarter of 2023, the private residential property index increased by 6.73% as compared to a year earlier, following y-o-y rises of 4.37% in Q3 2023, 7.46% in Q2, and 11.44% in Q1, according to figures released by the Urban Redevelopment Authority (URA). When adjusted for inflation, prices were up by a more modest 2.71% y-o-y in Q4 2023.

Singapore’s house price annual change

During the latest quarter (i.e. q-o-q in Q4 2023), residential property prices rose by 2.7% (1.95% inflation-adjusted).

By region:

  • In the Core Central Region (CCR), prices of non-landed private residential properties rose by 2.13% (but dropped 1.71% inflation-adjusted) in Q4 2023 from a year earlier, following a y-o-y decline of 1.32% in Q3 and annual growth of 3.75% in Q2 and 5.77% in Q1, according to URA. Quarter-on-quarter, prices increased by 4.21% (3.44% inflation-adjusted) during the latest quarter.
  • In the Rest of Central Region (RCR), property prices were up by 2.68% (but fell by 1.18% when adjusted for inflation) in Q4 2023 from the previous year. Quarter-on-quarter, prices fell by 1.22% (-1.95% inflation-adjusted) in Q4 2023.
  • In Outside Central Region (OCR), property prices soared by 13.79% (9.51% inflation-adjusted) during the year to Q4 2023, following y-o-y increases of 5.98% in Q3, 7.97% in Q2, and 8.92% in Q1. It was the second-highest growth seen in recent history. During the latest quarter, prices increased by 4.59% (3.82% inflation-adjusted). 

Residential property prices in Singapore rose by a cumulative 37.5% (22.2% inflation-adjusted) from 2016 to 2022, after falling by about 8% (7% inflation-adjusted) in the three years prior.

Demand continues to fall sharply, amidst the introduction of new rounds of property market curbs. In the first three quarters of 2023, total home sales, which include new sales, sub-sales, and resales, plunged 19.6% year-on-year to 14,710 units, following a huge decline of 34.8% during the full year of 2022, according to URA figures. All regions saw falling demand over the same period.

Property demand is projected to remain weak in 2024.

“Investors are expected to hold off purchasing in the near term, while genuine demand from owner-occupiers seeking accommodation will continue to support buying demand for private homes. However, these buyers will remain price-sensitive and guarded in their purchasing decisions due to prolonged market challenges, including high-interest rates, inflationary and recessionary pressures, and market cooling measures,” said JLL.

With this, overall house price growth in Singapore is projected to slow considerably in 2024 as price resistance sets in and more new housing supply enters the market.

The overall economy remains weak. During 2023, the economy posted a meager growth of just 1.2%, a sharp deceleration from expansions of 3.6% in 2022 and 8.9% in 2021, based on the preliminary estimates released by the Ministry of Trade and Industry (MTI). The economy grew by an average of 5.4% annually from 2010 to 2018 but slowed sharply to 1.3% in 2019. During 2020, Singapore suffered a pandemic-induced economic contraction of 3.9%.

Singapore’s economy is projected to expand by a modest 2.3% in 2024.

Prices of newly-launched developments

Prices in newly launched residential developments in Q3 2023 (based on Savills Q3 2023 report):

In Core Central Region (CCR):

  • In Orchard Sophia, located at Sophia Road, prices of residential units ranged from SG$2,758 (US$2,073) to SG$2,895 (US$2,176) per sq. ft. Of the 78 units offered, 28 units are already sold as of Q3 2023.

In the Rest of the Central Region (RCR):

  • In Grand Dunman, at Dunman Road, a total of 1,008 residential units are offered at a price range of SG$2,108 (US$1,584) to SG$2,805 (US$2,108) per sq. ft. About 57.3% are already sold.
  • In Pinetree Hill, at Pine Grove, residential units are priced from SG$2,215 (US$1,665) to SG$2,705 (US$2,033) per sq. ft. Of the 520 units offered in the market, 143 units are already sold in Q3 2023.
  • At the TMW Maxwell, located on Maxwell Road, prices of residential units range from SG$3,143 (US$2,362) to SG$3,739 (US$2,810) per sq. ft. A total of 324 units are available.

In the Outside Central Region (OCR):

  • In Lentor Hills Residences, located at Lentor Hills Road, prices of residential units ranged from SG$1,834 (US$1,378) to SG$2,451 (US$1,842) per sq. ft. Two-thirds of the 598 units offered are already sold.
  • In The Myst, situated at the Upper Bukit Timah Road, residential units are priced from SG$1,897 (US$1,426) to SG$2,323 (US$1,746) per sq. ft. Of the 408 units available, 153 units are sold.
  • In the Lakegarden Residences, at Yuan Ching Road, prices of residential units ranged from SG$1,880 (US$1,413) to SG$2,362 (US$1,775) per sq. ft. in Q3 2023. 71 of the 306 units available are already sold.
  • In The Arden, situated on Phoenix Road, 105 residential units are offered for a price range between SG$1,565 (US$1,176) and SG$1,861 (US$1,399) per sq. ft. About 30% are already sold in Q3 2023.
  • In The Shorefront, at Jalan Loyang Besar, 23 residential units are offered in the market for a price range of SG$1,897 (US$1,426) to SG$1,919 (US$1,442) per sq. ft.

Singapore Residential Property Price Index by Region graph

New rounds of property curbs

In February 2023, the government increased the buyer’s stamp duty rates for higher-value properties. More specifically, the portion of a property’s value in excess of SG$1.5 million (US$1.13 million) and up to SG$3 million (US$2.25 million) are taxed at 5%, while those in excess of SG$3 million are taxed at 6%.

Then in an expected move to restrain speculative buying and restrain house price increases, the government introduced another round of measures in April 2023, raising the additional buyer’s stamp duty (ABSD) rates further to “promote a sustainable property market and prioritize housing for owner-occupation,” said the Monetary Authority of Singapore (MAS), Ministry of Finance (MOF), and Ministry of National Development (MND) in a joint statement.

“Demand from locals purchasing homes for owner-occupation has been especially strong, and there has also been renewed interest from local and foreign investors in our residential property market,” said the authorities. “If left unchecked, prices could run ahead of economic fundamentals, with the risk of a sustained increase in prices relative to incomes.”

For Singaporean citizens, in April 2023 the ABSD rate was raised from 17% to 20% for those buying their second residential property, and from 25% to 30% for those buying their third and subsequent properties.

For permanent residents (PRs), the ABSD rate for second residential property purchases will rise from 25% to 30% and from 30% to 35% for third and subsequent property purchases.

Foreigners buying any residential property will now pay an ABSD flat rate of 60%, double the prior rate of 30%. For entities buying any residential property, the ABSD rate was also raised from 35% to 65%.

ADDITIONAL BUYER’S STAMP DUTY RATES
  Rates from Jul 6, 2018, to Dec 15, 2021 Rates from Dec 16, 2021, to Apr 26, 2023 New rates from Apr 27, 2023
Singaporeans Buying 1st residential property 0% 0% 0%
Buying 2nd residential property 12% 17% 20%
Buying 3rd and subsequent residential property 15% 25% 30%
Permanent Residents Buying 1st residential property 5% 5% 5%
Buying 2nd residential property 15% 25% 30%
Buying 3rd and subsequent residential property 15% 30% 35%
Foreigners

Buying any residential property

20% 30% 60%
Entities Buying any residential property 25% 35% 65%
Housing Developers Buying any residential property 25% + non-remittable 5% 35% + non-remittable 5% 35% + non-remittable 5%
Sources: Dentons Rodyk & Davidson LLP, MOF, MND, MAS, Global Property Guide

 Months earlier, in September 2022, the Singaporean government introduced several market curbs to restrain property demand and encourage prudent borrowing. These include the following:

  • The medium-term interest rate floor used to compute the total debt servicing ratio (TDSR) and mortgage servicing ratio (MSR) was raised by 0.5 percentage points for property loans granted by private financial institutions;
  • An interest rate floor of 3% for Housing and Development Board (HDB) loan eligibility letter applications from September 30, 2022, was introduced; and,
  • The loan-to-value (LTV) limit for HDB housing loans was lowered further from 85% to 80% of the flat value (after it was lowered from 90% to 85% in December 2021), effectively lowering the amount that home buyers can borrow;
  • A 15-month wait period for current and former owners of private residential property to purchase a non-subsidized HDB resale flat was imposed from September 30, 2022, onwards.

These measures came after previous curbs in December 2021 raised the ABSD rates for nearly all types of buyers.

Singapore government firmly restrains property prices

The moderation of house prices over the past years is the result of deliberate government policy.

Before and after the global economic crisis, Singapore’s property market surged. The residential property price index rose 38.2% during the space of only one year to Q2 2010 (34% inflation-adjusted).

The Singapore government sensibly took steps, and when these turned out to be not enough, took further measures.

In October 2012 it limited the mortgage term to 35 years and lowered loan-to-value (LTV) ratios to 60% for loans longer than 30 years (or loans stretching beyond age 65).

This was only the first of 10 rounds of property-market cooling measures.

Seller’s stamp duty (SSD) was then introduced on owner-occupied housing sold within a year of purchase. A little later, the stamp duty was revised upwards, with sales of owner-occupied houses sold within a year of acquisition taxed at 16% of the sale price. Then the holding period was increased from one year to four years. In subsequent rounds, LTV ratios were lowered and the minimum cash down payment increased.

Despite these measures, property prices kept surging. In the sixth round, new residential loans were capped at 35 years, with existing loans over 35 years facing tighter LTV ratios. In the seventh round, the government revised the additional buyer’s stamp duty (ABSD), increasing rates from 5% to 7% for Permanent Residents (PRs) first residential property purchase, and Singaporeans’ second residential purchase.

This resulted in a 23.5% decline in sales transactions within a year, but prices continued to surge till the end of 2013.

Eighth, ninth, and tenth rounds of market-cooling measures followed.

These market-cooling measures have been effective, as evidenced by the 10% decline in property prices from 2014 to 2017. After partially relaxing its market-cooling measures in March 2017, the Singaporean government reversed gear after 2017 sales reached 25,010 units, up 52.7% y-o-y - the biggest increase since 2009, according to URA.

From July 6, 2018, the ABSD rates were raised by 5% for all homebuyers and by 10% for entities, except for Singaporean citizens (SCs) and permanent residents (PRs) purchasing their first residential property. An additional ABSD of 5% was also introduced for developers buying residential properties for housing development.

The government also tightened loan-to-value (LTV) limits on residential property loans from 80% to 75%.

Also, the government raised the stamp duty on home purchases with a value exceeding SG$ 1 million (US$ 751,484) from 3% to 4% in February 2018.

These property curbs have successfully restrained the market in recent years.

Residential property sales plunging

Demand continues to fall sharply, amidst the introduction of new rounds of market-cooling measures. In the first three quarters of 2023, total home sales, which include new sales, sub-sales, and resales, plunged 19.6% year-on-year to 14,710 units, following a huge decline of 34.8% during the full year of 2022, according to URA figures.

During the first three quarters of 2023:

  • Uncompleted private residential property sales fell by 17% y-o-y to 5,159 units, following a nearly 47% plunge during 2022.
  • Completed private residential property sales dropped 12.8% y-o-y to 170 units, in contrast to a 54.1% surge in 2022.
  • Sub-sales skyrocketed by 57.4% y-o-y to 883 units in Q1-Q3 2023, after increasing by 34.7% in 2022.
  • Re-sales were down by 25% y-o-y to 8,498 units, following about 30% fall in 2022.

By region:

  • In Core Central Region, property sales declined by 18.3% to 2,874 units in Q1-Q3 2023 from a year earlier.
  • In the Rest of the Central Region, sales were down by 5.7% y-o-y to 5,637 units in the first three quarters of 2023.
  • In Outside Central Region, sales dropped by a huge 29.6% y-o-y to 6,199 units over the same period.

Singapore Number of Dwelling Units Sold graph

Foreign demand is falling

Nearly 39% (about 2.3 million) of Singapore’s population are foreigners, the sixth-highest percentage of foreigners in the world. Of these more than 9% (o.54 million) are permanent residents, and the remaining 28% (1.8 million) are expats, based on figures from the Department of Statistics Singapore.

Tighter immigration rules are being imposed by the government, due to strong popular disquiet. Beginning 1 September 2015 work pass holders need to meet a minimum fixed monthly salary of SG$5,000 (US$ 3,757) to sponsor the stay of their spouse/ children here (on Dependant’s Pass) and a minimum fixed monthly salary of SG$10,000 (US$7,515) to sponsor the stay of their parents here (on Long Term Visit Pass).

Aside from the tighter immigration rules and the imposition of market-cooling measures, the COVID-19 pandemic has adversely impacted demand from foreign homebuyers in recent years.

In the past four years from 2020 to 2023, the total number of private houses purchased by foreigners in Singapore dropped to their lowest levels in the past two decades. According to real estate consultancy firms ERA Realty Network and Orange Tee & Tie, the share of foreign homebuyers to total sales in the country fell to 4.1% in 2020, 4.5% in 2021, and 3.5% in 2022, as compared to about 7% to 8% share a decade ago. During 2023, the foreigners’ share in total house purchases was estimated at 3%.

In fact, in Q4 2023, foreigners accounted for just 1.5% of the total number of private homebuyers in Singapore.

Purchases made by foreigners plunged to just 62 in Q4 2023, sharply down from 271 in Q1 2023 and the lowest level since the government first introduced ABSD in December 2011, said Lee Sze Teck of Huttons.

Mainland Chinese buyers typically account for the largest group of non-Singaporean homebuyers in the country, followed by Americans, Malaysians, Qataris, Indonesians, and Indians. In 2022, they purchased 241 non-landed private homes in Singapore, which constituted 26.5% of transactions by foreign buyers. However, it was the lowest since 2010 and represented only about 1.3% of total condo sales, said PropNex CEO Ismail Gafoor. 

Then in the second half of 2023, the number of homes purchased by Chinese buyers plunged to just 11, down from 177 in H1, according to Huttons.

As such, American buyers overtook the Chinese to become the biggest group of foreign homebuyers in Singapore in H2 2023. US citizens are treated the same as Singapore citizens under the US-Singapore Free Trade Agreement, that is, no additional buyer’s stamp duty is payable on the first Singapore residential property purchase.

Foreign demand is expected to remain subdued in the medium term, amidst the imposition of another round of market-cooling measures in April 2023, raising the ABSD rates further for nearly all types of buyers, including foreign homebuyers.

For foreigners, the ABSD doubled from the previous flat rate of 30% to 60%.

After the move, the proportion of foreign homebuyers in the CCR fell to 5.3% in Q3 2023, lower than the 10% in Q2 2023 and 15% in Q1 2023.

“The CCR sub-market is subject to greater challenges than the RCR and OCR, as it has a greater exposure to foreign purchasers and property investors and the prohibitive hikes in ABSD rates on these buyers have subdued demand and weighed on prices in the CCR,” said JLL.

Foreigners have been able to buy any apartment without prior government approval since the Residential Property Act of July 19, 2005. However, foreigners still cannot purchase vacant land and landed properties without permission from the Singapore Land Authority. Non-residential property is not subject to these ownership restrictions.

Construction activity improving, and residential supply increasing

In the first three quarters of 2023, there were 6,491 uncompleted private residential units launched in Singapore, up by a whopping 61.3% from the same period last year, according to URA. This was a noticeable improvement from the 57% decline in the total number of uncompleted private residential units launched during the whole year of 2022.

Yet there are wide regional variations:

  • In CCR, launches plummeted by 53.5% to 505 units in the first three quarters of 2023 from a year earlier.
  • In RCR, launches rose by a whopping 216% to 4,183 units in Q1-Q3 2023 from the same period last year.
  • In OCR, launches were up by 11.8% y-o-y to 1,803 units in Q1-Q3 2023.

The total supply in the pipeline with planning approvals stood at 36,949 units in the first three quarters of 2023, up slightly by 1.1% from the previous quarter but down sharply by 25.2% from the same period last year. Of these, 16,747 units are still available in the market, compared to 15,677 units in a year earlier.

  • Private residential units under construction plummeted by 30.8% y-o-y to 26,814 units in Q1-Q3 2023. Quarter-on-quarter, they declined 18.3%.
  • Planned development fell by a modest 4.7% to 10,135 units in Q1-Q3 2023 from a year ago and declined by 10.7% from the previous quarter.
MAJOR PRIVATE RESIDENTIAL PROJECT LAUNCHES, Q3 2023
Project Location Developer Locality No. of Units
Kassia Flora Drive Tripartite Developers Pte Ltd OCR 280
The Hill @ One-North Slim Barracks Rise Kingsford Real Estate Development Pte Ltd RCR 142
Residential apartments Cairnhill Rise Ju-I Properties Pte Ltd >CCR 75
Newport Residences Anson Road Hong Leong Properties Pte Ltd CCR 443
Skywaters Residences Shenton Way Perennial Shenton Property Pte Ltd CCR 215
J’den Jurong East Central 1 Tanglin R.E. Holdings Pte Ltd OCR 368
The Lakegarden Residences Yuan Ching Road Winville Investment Pte Ltd OCR 306
Marina View Residences Marina View Boulevard Development Pte Ltd/Boulevard Midtown Pte Ltd CCR 683
Hillock Green Lentor Central Lentor Central Development Pte Ltd OCR 474
Sora Yuan Ching Road Lakeside Residential Pte Ltd OCR 440
Residential apartments Sophia Road Sophia Residential Pte Ltd/Sophia Commercial Pte Ltd CCR 373
Hillhaven Hillview Rise East Residences Pte Ltd OCR 341
Lentoria Lentor Hills Road Lentor View Pte Ltd OCR 267
Watten House Shelford Road United Venture (Watten) Pte Ltd CCR 180
The Arcady At Boon Keng Serangoon Road KSH Ultra Unity Pte Ltd RCR 172
Source: Savills Residential Sales Briefing, Q3 2023

There were a total of 406,663 housing units available in Singapore in Q3 2023, up by 2.1% from the previous quarter and by 5.1% from a year earlier, according to URA. Of which 372,322 units are occupied, while the remaining 34,341 units are available, making up a vacancy rate of 8.4%, up from 6.3% in the previous quarter.

Singapore Private Residential Supply graph

Mortgage loan growth decelerating fast

Outstanding housing loans rose by a minuscule 0.6% in Q3 2023 from the same period last year to SG$220.54 billion (US$165.73 billion), following annual growth of 3.6% in 2022 and 6.7% in 2021, based on figures from the MAS.

About three-fourths of the outstanding housing loans are for owner-occupied properties while the remaining are for investment properties.

As a percent of GDP, the size of the mortgage market contracted to an equivalent of 33% in 2023, down from 34.3% of GDP in 2022, 37.7% in 2021 and 41.9% of GDP in 2020.

Variable interest rate mortgages dominate Singapore’s housing market. Tweaking the rate on mortgages, plus government restrictions on land use and ownership, has helped pre-empt a housing boom despite sharply lower interest rates over the past decade.

Singapore Housing and Bridging Loans graph

Home loan interest rates in leading banks

Currently, interest rates for home loans for some of the leading banks in Singapore are as follows:

  • DBS, Singapore’s largest lending, offers fixed-rate home loans at 3.75% with lock-in periods of 2 to 5 years.
  • At OCBC, two- and three-year fixed-rate mortgages are offered at a 3.8% loan rate.
  • UOB offers two- and three-year home loans at a 4% interest rate per annum.
  • At HSBC, interest rates for two- and three-year fixed-rate mortgage loans are set at 3.6% and 3.5%, respectively.

Singapore Interest Rates Percentages graph

In Singapore, variable interest rate mortgages are pegged to the Singapore inter-bank offered rate (SIBOR). A typical SIBOR-pegged adjustable rate mortgage looks like this:

Period Interest Rate (p.a.)
First Year 0.75% + 1-Month SIBOR
Second Year 0.75% + 1-Month SIBOR
Third Year 1.00% + 1-Month SIBOR
Fourth Year onwards 1.25% + 1-Month SIBOR

The mortgage interest rate, therefore, comprises two parts a) spread or margin and b) index, typically the Singapore Interbank offered rate (SIBOR).

Rent growth decelerates, as rental supply increases

Rents continue to rise dramatically, though there is a noticeable deceleration in the growth rate, as housing completions increase and demand for residential rental properties moderates.

In Q3 2023, the rental index of private all-residential properties rose by 19.29% from a year earlier (14.6% inflation-adjusted), the seventh consecutive quarter of double-digit y-o-y increases but the lowest growth since Q2 2022, according to URA. Quarter-on-quarter, the overall rental index was up by a meager 0.8% (fell slightly by 0.15% inflation-adjusted) in Q3 2023.

During the year to Q3 2023, the average rent for landed properties rose strongly by 35.6% while it increased by 17.1% for non-landed properties.

Singapore Residential Rent Index Annual Change graph

Savills Q3 2023 Singapore Residential Leasing report noted that “high-end rents begin to soften” as “heightened economic uncertainties, a weaker labour market and deteriorating business sentiment continue to exert pressure on the leasing market.”

Rent movements in Q3 2023 by region:

  • Core Central Region: rents were up by 14.5% y-o-y in Q3 2023, a deceleration from annual increases of 24.5% in Q2 and 31.5% in Q1. In fact, rental rates declined by 1.7% q-o-q.
  • Rest of Central Region: rents increased by 18.4% from a year ago, after registering y-o-y increases of 27.4% in Q2 and 32.2% in Q1. On a quarterly basis, rents rose by 1.9% in Q3 2023.
  • Outside Central Region: rents rose by 19.6% y-o-y in Q3 2023, following annual increases of 28.5% in Q2 and 34.5% in Q1. On a quarterly basis, rents rose by 1.3% during the latest quarter.

In the luxury market, the Savills basket of high-end non-landed private residential rents fell by 0.6% q-o-q in Q3 2023 to an average of SG$6.16 (US$4.63) per sq. ft. per month. It was the first rental decline for this property class after registering a cumulative growth of 51.9% over the last two and a half years.

“For 2023, given the strong showing in the first half of the year, non-landed rents are expected to rise 10% year-on-year (YoY),” said Savills.

Though rents are expected to fall this year. “For 2024, we are forecasting a general rental decline of about 5% due to the large number of new completions this year and the strong economic headwinds,” Savills noted.

In Q3 2023, a total of 23,145 private homes were rented out in Singapore – up by 17.3% from the previous quarter but still down by 9.8% from a year earlier.

“From 2010 to 2019 statistics, the number of private residential leasing transactions in Singapore had been rising by an annual average of 7.8% pre-COVID,” said Savills. “However, this pattern was disrupted by the pandemic and the expected transaction increase did not materialize in 2022 even though travel restrictions mostly ended globally.”

Singapore Rend Indices of Non-Landed Properties graph

Moderate rental yields for high-end units

Singapore is a safe haven, it is a liquid market, and everyone in Asia knows and trusts its institutions. Property in Singapore commands a premium and conversely returns to owners who rent out their properties are low.

Apartments in Singapore are expensive, at around US$1,060,000 to US$1,631,000 for a two-bedroom apartment. That’s because there is a ‘global city’ premium. As such, gross rental yields in Singapore remain moderate, ranging between 2.81% and 6.86%, with a nationwide average of 4.78% in Q2 2023, according to a study conducted by the Global Property Guide in August 2023.

Yields are a little higher on smaller apartments than on large ones, as is typical in most property markets. 99-year leasehold properties have the highest rental yields in Singapore because of their lower prices relative to other types of properties.

Singapore has a small private rental sector, mostly serving expatriates. In the local sector, 81% of all rental units are owned by the HBD. Since 2014 many expatriates have relocated from the Core Central Region to suburban and fringe areas Outside Central Region.

Sluggish economic growth but the labor market remains tight

Singapore’s economy grew by 2.8% in Q4 2023 from a year earlier, following y-o-y expansions of 1% in Q3, 0.6% in Q2, and 0.5% in Q1, as economic activity improves, based on the preliminary estimates released by the Ministry of Trade and Industry (MTI). It was the twelfth straight quarter of y-o-y economic expansion. On a quarterly seasonally-adjusted basis, real GDP grew by 1.7% in Q4 2023.

In Q4 2023:

  • The services sector grew by 2.4%, following y-o-y increases of 2.3% in Q3, 2.8% in Q2, and 1.9% in Q1.
  • Construction rose strongly by 9.1%, an acceleration from y-o-y growth of 6.2% in Q3, 7.7% in Q2, and 7.9% in Q1.
  • Manufacturing expanded by 3.2%, an improvement from y-o-y declines of 4.7% in Q3, 7.5% in Q2, and 5.2% in Q1.

However, for the whole year of 2023, the economy posted a meager growth of just 1.2%, a sharp deceleration from expansions of 3.6% in 2022 and 8.9% in 2021.

Singapore GDP Growth and Inflation graph

The economy grew by an average of 5.4% annually from 2010 to 2018 but slowed sharply to 1.3% in 2019. During 2020, Singapore suffered a pandemic-induced economic contraction of 3.9%.

Singapore’s economy is projected to expand by a modest 2.3% in 2024, based on a recent survey conducted by MAS.

Yet labor market conditions remain tight. In Q3 2023, the overall unemployment rate stood at 2%, up from 1.9% in the previous quarter but down from 2.1% a year earlier, according to the Ministry of Manpower (MOM). Resident unemployment was 2.8% in Q3 2023 while citizen unemployment stood at 3%.

Nationwide jobless rate averaged 2.2% from 2010 to 2022.

“Singapore’s labor market remained resilient despite the weak economic environment in 2023. Although the overall employment rate dipped, Singapore’s employment rate remained the fourth highest compared to the Organisation for Economic Co-operation and Development (OECD) countries,” said the MOM. “With the labor market remaining tight, unemployment and long-term unemployment rates fell for workers across occupational groups and indicators of labor under-utilization improved.”

Annual inflation eased to 3.6% in November 2023, the lowest reading since October 2021, as prices for food, housing, and transportation eased, according to Statistics Singapore. Overall inflation accelerated to 6.1% in 2022, from an annual average of just 0.7% in 2013-21.

In October 2023, the Monetary Authority of Singapore (MAS), the country’s central bank, maintained the prevailing rate of appreciation of the S$NEER policy band, following five consecutive tightening measures in the past two years. There will be no change to its width and the level of the policy band. However, MAS reiterated that it will strictly monitor global and domestic economic developments and adjust its monetary policies accordingly.

“The current appreciating path of the S$NEER policy band is assessed to be sufficiently tight. A sustained appreciation of the policy band is necessary to dampen imported inflation and curb domestic cost pressures, thus ensuring medium-term price stability,” said MAS.

The average exchange rate in December 2023 was US$ 1 = SG$ 1.3328, a 1.5% appreciation from a year ago.

Singapore Residential Property Price Index by Region graph

Sources: