At the BCA-REDAS Built Environment and Real Estate Prospects Seminar on Jan 22, Teo Jing Siong, group director of the strategic planning and transformation office at the Building and Construction Authority (BCA), outlined a robust but moderating construction demand outlook for 2026.

Echoing Minister for National Development Chee Hong Tat’s address, Teo said total construction demand this year is projected to range between $47 billion and $53 billion, building on strong momentum in recent years. Demand rose from $44.6 billion in 2024 to an estimated $50.5 billion in 2025.

Public residential construction demand reached a record $9.5 billion in 2025, but is expected to moderate to between $6.2 billion and $6.8 billion in 2026. Teo attributed the easing to an adequate supply of Build-To-Order (BTO) flats, alongside continued upgrading works under home improvement and neighbourhood renewal programmes.

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Private residential construction demand is similarly forecast to soften, easing from $6.2 billion in 2025 to between $5 billion and $5.5 billion in 2026. This reflects fewer Government Land Sales (GLS) sites released to maintain market stability, as well as a smaller pipeline of en bloc redevelopment projects. Key contributors to activity include Chuan Grove, a joint venture between Sing Holdings and Sunway MCL; Telok Blangah Residences by Kingsford Group; and Pinery Residences at Tampines by Hoi Hup Realty and Sunway MCL.

In contrast, the commercial sector is set for a sharp upswing. Building construction demand is projected to surge from $2.2 billion in 2025 to between $6.1 billion and $6.7 billion in 2026, driven largely by a new contract for the Marina Bay Sands integrated resort extension and upgrading works to its existing towers. Demand will also be underpinned by major redevelopment projects at Tanglin Shopping Centre and HarbourFront Centre.

Industrial construction demand, however, is expected to decline from $7.1 billion in 2025 to between $4.6 billion and $5.4 billion in 2026. Despite the pullback, Teo noted that demand remains broadly in line with 2024 levels, supported by ongoing developments in biomedical and pharmaceutical facilities in Tuas, high-tech warehouses and distribution centres at Sungei Terong, and a data centre in the Changi area.

Demand for institutional and civil engineering works — covering public-sector buildings and major infrastructure projects — is expected to reach between $13.5 billion and $15.3 billion, and $11.6 billion to $13.4 billion, respectively. Institutional demand will be driven mainly by the development of Changi Airport Terminal 5, while civil engineering works will be anchored by extensions to the Thomson-East Coast Line and the Cross Island Line.

“A collaborative approach underpinned by innovation, productive technologies and best practices must form the cornerstone of the industry’s growth strategy,” Teo said. He added that companies should tap government incentives to develop productivity-enhancing solutions, noting that those adopting collaborative contracting models alongside innovation-driven technologies will be better positioned to navigate market volatility and unforeseen challenges.