Is property still a good investment for Singaporeans?

SINGAPOREANS have a penchant for residential properties, seeing them as a good investment for capital gains and for passive income during retirement. The turbulence in financial markets in recent years has added to the allure of properties, which are perceived as relatively more stable and able to offer good long-term value.

The positive perception of the Singapore property market is not without merit. The Urban Redevelopment Authority’s residential property price index shows a strong 36 per cent gain in the past five years, up to the end of the third quarter of 2022. In comparison, Singapore’s benchmark Straits Times Index, which tracks the local stock market, is down by nearly 3 per cent during the same period. Even global equities, as measured by the MSCI World Index, are up by a smaller 26 per cent in Singapore dollar terms in the corresponding period.

The sharp gains in the property market have caught the attention of many investors, who may be keen to get on the bandwagon and purchase an investment property. However, these gains have also caught the attention of Singapore’s authorities, who on Sep 29 announced a fresh set of property cooling measures. Though these were mainly targeted at the resale public housing market, there will be some impact on the private residential property segment too.