The Unspoken Reason Property Prices Keep Rising

This symbiotic relationship creates a powerful, self-perpetuating cycle. As HDB resale prices climb, more families find themselves with significant capital gains, enabling them to cross the threshold into private property ownership. This consistent demand from HDB upgraders forms a fundamental pillar of support for entry-level private homes, insulating the segment from the full impact of global economic headwinds or fluctuating foreign demand.

This deep-rooted aspiration is further amplified by Singapore's status as a global safe haven for capital and talent. The influx of high-net-worth individuals and skilled professionals, even with punitive stamp duties in place, creates a steady stream of demand at the upper end of the market. While the headline 60% Additional Buyer's Stamp Duty (ABSD) for foreigners has significantly curtailed speculative purchases, those who see Singapore as a long-term base for family and business continue to see value, viewing the high entry cost as the price of stability and security.

This continuous demand, coupled with the physical constraint of a land-scarce island, creates a powerful perception of inevitability—that in the long run, prices have nowhere to go but up. It is this belief, as much as any economic indicator, that propels buyers to commit to significant long-term financial obligations, even when affordability metrics appear stretched.

Simultaneously, the government aggressively manages the supply pipeline through its Government Land Sales (GLS) programme. By strategically releasing land parcels for development, authorities can moderate price pressures over the medium term. In 2023, land for over 9,250 private homes was released, the highest in a decade. This proactive supply management is complemented by a massive ramp-up in the construction of public housing (BTO flats), with a commitment to launch up to 100,000 new units between 2021 and 2025. This aims to sate the demand for first-time homebuyers and, in turn, reduce the upward pressure on the HDB resale market.

These interventions create a managed market environment unique in the world. While prices continue to climb, the pace of growth is moderated, and the financial system is insulated from the kind of speculative bubbles seen elsewhere. Buyers operate with the implicit understanding that while the government will not allow a runaway market, it also has a vested interest in preventing a sharp, destabilizing collapse.

Buyers, in turn, have become far more selective. The era of buying any new launch and expecting a quick profit is over. Today’s purchasers are armed with more data and are acutely aware of interest rate pressures. They are meticulously comparing the entry price of new launches against the value offered by comparable resale properties in the vicinity. Projects with unique selling propositions—unblocked views, proximity to top schools, or direct MRT access—are quickly snapped up, while less attractive projects may see a more tepid response. This flight to quality indicates a maturing market where fundamentals, rather than just momentum, are driving purchasing decisions.

​For prospective homebuyers, the path forward requires a new level of financial prudence and strategic thinking. Stress-testing mortgage affordability at an interest rate of 4% or higher is no longer a theoretical exercise but a critical necessity. For HDB owners aspiring to upgrade, a keen understanding of the future BTO supply pipeline is crucial, as a wave of new flats reaching their Minimum Occupation Period in the coming years could temper resale price growth in certain estates. Ultimately, navigating this market is less about timing the peaks and troughs and more about understanding one's own financial capacity and long-term needs. The unyielding climb of property values may seem daunting, but it is a direct reflection of the nation's success—a challenge born from the very stability and prosperity that makes Singapore so attractive in the first place.