This report profiles Singapore’s property industry, discussing market trends and outlook through H1 2014. The report also highlights leading players in the sector including CapitaLand Ltd, City Developments Ltd, and Keppel Land Ltd.

Singapore property prices cooled down in 2013-14 after the implementation of several rounds of curbing measures. Investment sentiments particularly among foreign buyers in the high-end residential segment have taken a beating due to the temporary punitive property cooling measures imposed. The latest round of cooling measures is also making borrowing more difficult.

Demand fundamentals are expected to remain healthy for Singapore’s residential property market in 2014, supported by substantively low interest rate environment, lack of alternative good investment options, abundant liquidity and seemingly genuine demand for homebuyers who look forward to Singapore’s future. Interest in suburban developments with good transportation connectivity and amenities will also continue to support housing demand.

The office market is expected to be stable as multinational corporations continue to seek quality office space. Singapore remains an attractive business gateway to Asia amid a low interest rate environment. Based on the Urban Redevelopment Authority (URA) statistics, the rental of office space rose even amidst fall in residential rentals. Retail market is also expected to remain stable backed by a high occupancy rate.

Key Points:

• The property price index for private residential units declined from 215.4 points in Q2/2013 to 209.4 points in Q2/2014. The property rental index also decreased y/y from 164.4 points in Q2/2013 to 161.9 points in Q2/2014.

• According to the URA, the total of number of private residential property transactions in H1/2014 declined 53% y/y (compared to H1/2013) to 6,867 deals with a value of SGD 10.5bn mainly due to the property cooling measures

• The Singapore office market continued to expand in Q2/2014 with a 2.6% y/y increase in supply. URA statistics showed that the island-wide office occupancy rate declined from 91.3% in Q2/2013 to 90.4% in Q2/2014 due to increase in supply.