Data from the Urban Redevelopment Authority (URA) highlights that private property prices grew by 3.9% in 2024, with signs of moderation as price index growth rates declined for the third consecutive year since 2022.
On a quarterly basis, the number of private residential units taken up by buyers nearly doubled from 1,160 units in 3Q2024 to 3,420 units the following quarter.
At the same time, the Housing and Development Board (HDB) resale price index hit an all-time high while the number of public residential resale applications grew by 8.4% y-o-y, about 3% lower than the 2021 to 2023 average growth rate of public housing uptake.
All in all, a total of 11 government land sales (GLS) sites were awarded in 2024, along with three executive condominium (EC) sites and one mixed commercial and residential development site.
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Developers’ appetite remained subdued for most of the year, following the trend in 2023.
Some sites only attracted single bids as developers’ sentiment failed to pick up even as private residential prices continued to rise.
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On residential construction, SJ’s report finds that demand in the public residential sector is expected to grow upwards of $9.2 billion.
The HDB is set to launch approximately 19,600 build-to-order (BTO) flats in 2025 to address greater housing demand, with the board announcing earlier that year that all BTO projects delayed by the pandemic had been completed, with the last two developments wrapped up in January.
In the private sector, the government has kept the pace of site tenders from last year, with 15 sites under the URA’s schedule of confirmed list sites, and four more under the schedule of reserve list sites slated for the 2005 GLS programme.
Amid a robust market for new launches and increasing property prices, developers are wary of another round of cooling measures, which may dampen buyers’ appetite.
Since December 2021, Singapore has introduced four sets of cooling measures, with the most recent implemented in August 2024, where the loan-to-value limit for public housing was further reduced from 80% to 75%.
A fast-changing commercial landscape
After recording a 47% growth in construction demand last year, the commercial industry is set to moderate to between $3.6 billion and $5.1 billion in construction value in 2025.
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Construction works have commenced for the redevelopment of Com Centre, Golden Mile Complex and Central Mall, while major projects in the pipeline include the re-development of Shenton House, which is eligible for a 25% bonus gross floor area (GFA) under the Central Business District Incentive Scheme (CBDI).
Two incentive schemes introduced in 2019 will also be extended for another five years from 2025, namely the CBDI and the Strategic Development Incentive (SDI), with most of the 17 CBDI and 12 SDI proposals granted in-principal approval to-date.
The CBDI allows 25% to 30% additional GFA for central business district (CBD) redevelopment projects that dedicate at least 40% of an entire development for residential purposes, while the SDI evaluates a development’s external features to consider alterations to GFA, land use, quantum and building height.
Semicon infrastructure leads the way
Singapore’s manufacturing sector, a key driver of the nation’s economy, expanded 7.4% y-o-y in 4Q2024 according to the Ministry of Trade and Industry (MTI).
This was driven by output growth in the electronics, transport engineering and general manufacturing clusters.
In 2024, Singapore’s electronics sector attracted $13.5 billion in fixed asset investment, with more than $11 billion from the manufacturing sector and major investments in semiconductors.
According to the Economic Development Board (EDB), Singapore accounts for about 10% of global semiconductor output, 5% of global wafer fabrication capacity and 20% of global semiconductor equipment production.
Tapping on this, the Jurong Town Corporation (JTC) is preparing 11% more land in wafer fabrication parks to attract semiconductor giants capitalising on artificial intelligence advancements.
As AI continues to grow and demand for capacity rises, at least 300 megawatts (MW) of data centre capacity will be added in the next few years, with another 200MW allocated only for operators who use green energy options.
Under the pilot data centre call for application exercise, US-based data centre operator Equinix is building its sixth data centre with an initial investment of $348 million.
Other major industrial projects in the pipeline include the relocation of Collins Aerospace’s existing manufacturing facility in Bedok to a new $336 million site in Seletar Aerospace Park, and the rejuvenation of a 4.41ha industrial site at Kallang Way.
As part of the industrial government land sales requirement, the existing three-storey terraced factory on the industrial site will be retained and repurposed, alongside a new multi-user food manufacturing factory.
The biomedical manufacturing space is also active, with biopharmaceutical company AstraZeneca announcing plans to set up a $2 billion manufacturing facility for the production of an antibody drug which has cancer-killing properties.
From Jan 1, 2026, the Land Intensification Allowance (LIA) scheme, which provides tax allowances to owners of construction facilities such as prefabrication hubs, will be expanded to support multi-storey design for manufacturing and assembly facilities related to prefabrication operations.
Infrastructural and institutional works
The civil engineering sector, meanwhile, is poised for another stellar year, with more than $10 billion worth of projects in the pipeline.
The Civil Aviation Authority of Singapore (CAAS) has committed to invest $1 billion over the next five years to support the development of Changi Airport, in addition to the $5 billion top-up to the Changi Airport Development Fund, as announced during Budget 2025.
The rejuvenation of systems and terminal facilities at Changi Terminal 3, the report adds, is also on the cards.
In northern Singapore, the $900 million contract for the construction of the Woodlands Checkpoint Extension to Old Woodlands Town Centre, and the $353 million contract for the external infrastructure works to Woodlands Checkpoint have just been awarded, with construction works commencing in 2Q2025.
A new extension to the Jurong Region Line, called the West Coast Extension MRT will be constructed to further improve rail connectivity in the West, while feasibility studies for two new upcoming MRT lines, Tengah Line and Seletar Line are ongoing.
If possible, construction works are expected to commence from 2040 onwards.
Other major infrastructure projects in the pipeline this year include stations and tunnels for Downtown Line 2 Extension, and the enhancement of Xilin Avenue, East Coast Parkway and Tanah Merah Coast Road.
In the institutional sector, the Ministry of Health (MOH) has announced that 13,600 beds will be added to the healthcare system to cope with the demand on healthcare services.
Healthcare projects in the 2025 pipeline include the Eastern General Hospital and the redevelopment of Alexandra Hospital, in addition to the renovation works at Changi General Hospital renovation and Tengah General Hospital.
The redevelopment of the National University Hospital, to be carried out in a 10-year span, is expected to replace half of its 1,200 beds and add another 100 new ones by 2033.
By 2038, the remaining older beds will also be replaced, and another 200 beds will be added, taking the hospital’s total capacity to 1,500 beds.
Tender price movement
The Building and Construction Authority’s (BCA) tender price index (TPI), a measure that tracks the trend of contractors’ pricing levels in accepted tenders for construction projects, indicates that tender prices for 2024 have increased by 1.2% y-o-y.
In general, raw material prices have stabilised, while steel reinforcement bar prices have dropped to levels last seen since December 2019, amid a supply glut in the market.
On the other hand, the SJ report finds that an increase in demand for copper, together with supply constraints due to a lack of mineral investment and reduced refinery capabilities, has driven prices up.
Global copper demand is predicted to increase y-o-y by 2.6%, with the report noting that by 2035, demand could double from 25 million metric tonnes to 50 million metric tonnes.
Freight rate tracker, the Drewry World Container Index stood at US$2,265 ($2,924) per 40-foot container in April, compared to US$3,162 the same time last year.
Moving forward, Drewry expects logistic rates to increase due to a reduced capacity and the domino effects arising from the trade tariffs.
With regards to employment statistics, since Jan 1, the minimum qualifying salary for new Employment Pass (EP) applications has increased, while the minimum qualifying salary for S Pass applicants and S Pass levy rates are set to increase from Sept 1.
From June 1, all companies in the construction sector will need to be registered in the BCA’s contractors registration system to apply for and renew S Passes and work permits for construction workers.
The report notes: “Sectors such as manufacturing, electronics and semiconductor may bear the heaviest brunt of the trade war, while the construction sector may be impacted by a withdrawal or reduction of capital expenditure in these sectors.”
“Notwithstanding BCA’s projection of strong construction demand for 2025, we expect that private sector developers will adopt a more cautious approach, particularly if the economy slides into recession,” adds the team of analysts at SJ.
The continuation of the current uncertainty of the tariffs situation, they note, which may result in slower economic growth and concerns of recession, is likely to discourage investment in private sector projects.
A contraction in private sector project demands may advocate a more competitive tendering environment, especially for contractors that are keen to fill up their order book, they add.
“With a steady stream of construction demand from the public sector, we foresee construction prices will continue to inch up, albeit at a slower pace compared to last year,” concludes the team.
With the trade tariff situation ever evolving, their preliminary cost escalation projection for 2025 is in the region of 0% to 2%, and the team expects mechanical and electrical construction costs to continue creeping up.
