The overall Singapore residential market has been resilient through past geopolitical shocks. (Photo: Samuel Isaac Chua / EdgeProp Singapore)
Despite rising tensions in the Middle East rattling global financial markets, Singapore’s residential property sector is likely to remain on solid footing, and history suggests there may be little long-term impact, industry players said.
While geopolitical uncertainty may potentially moderate transaction volumes in the near term, the Singapore residential market today is supported by a predominantly owner-occupier base, calibrated supply management and prudent financing regulations, said ERA Singapore CEO Marcus Chu.
“These structural safeguards significantly reduce the risk of excessive speculative swings,” he added.
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Chu reckoned that in the immediate term, equity market fluctuations might contribute to a more cautious investment climate, with property developers and buyers adopting a measured approach as they assess evolving geopolitical risks.
Still, property investment is fundamentally a long-term commitment. Singapore buyers are supported by stable household balance sheets and prudent leverage levels, anchoring their decisions on structural fundamentals rather than short-term market movements, he added.
Furthermore, real assets in stable jurisdictions like Singapore often become relative safe-haven allocations during periods of global uncertainty.
Huttons Asia CEO Mark Yip said, “It would not be a surprise to see more wealth coming to Singapore and contributing to demand for properties.” This is because ultra-high-net-worth individuals want stability and low taxes.
The luxury property market in Singapore may thus see a steady increase in demand if the conflict is prolonged, in Yip’s view.
The widening US-Israel-Iran conflict, which has spilled over multiple Gulf states, may have shaken the image of stability in Dubai — one of the top financial centres in the world, Huttons noted. Meanwhile, Singapore continues to be ranked highly for its stability and the strong Singapore dollar.
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That said, there is a chance that Singapore may potentially see inflationary pressures due to the heightened geopolitical uncertainty. The recent rise in oil prices may lead to elevated energy and logistics expenses trickling through the supply chain and translating into higher construction costs, thus driving overall development costs higher, according to Newmark.
“Coupled with higher land costs, we expect to see upward pressure on new home prices in the near future,” said Newmark head of research, Wong Shanting.
ERA’s Chu pointed out that history provides a useful perspective when it comes to the impact of conflicts on the Republic’s property market.
Based on the Urban Redevelopment Authority's private residential property price index, prices in Singapore rose about 160% in the five years following the First Gulf War and increased 82.9% during the Iraq War period between 2003 and 2011.
More recently, since the onset of the Russia-Ukraine conflict, private home prices in Singapore have grown 14.7%, despite a significantly higher base.
"Although each crisis triggered short-term volatility, the longer-term trajectory of Singapore's residential market remained intact," said Chu.
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Comparison of Iraq war, property prices and GDP:
Likewise, Yip from Huttons highlighted how the Iraq War did not have an impact on Singapore property prices.
Property prices in the city-state went up by 2.8% in the one year following the start of the war. For example, Icon Residence, a high-rise apartment in Tanjong Pagar, saw a 4.7% increase in average selling price from $695 psf in 2003 to $728 psf in 2004.
This may be due to a flight to safety during times of uncertainty, Yip said.
While the overall Singapore residential market has been resilient through past geopolitical shocks, capital flows tend to favour segments with stronger scarcity dynamics and international positioning during periods of uncertainty, according to ERA.
The Core Central Region (CCR) in Singapore may be a segment to watch. The projected CCR launch pipeline this year is estimated to be about 44.7% lower than 2025 levels, pointing to a materially tighter supply environment.
“Limited new stock, coupled with underlying demand, may provide price stability within the segment,” Chu said.
Current and upcoming supply of new CCR launches:
In recent days, there has been a significant escalation of hostilities involving Israel, Iran and the US, which has driven oil price volatility and equity sell-offs across global markets. The conflict has effectively locked down the Strait of Hormuz, a crucial corridor for global oil and gas flows.
As Singapore is a small and open economy, global geopolitical developments inevitably influence local market sentiment, Chu noted.
Barring a prolonged and severe global economic shock, ERA remains confident that Singapore's residential market will continue to be supported by strong economic fundamentals, stable household balance sheets and resilient housing demand.
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