Q1 property sentiment drops to 4.9 amidst price pressures

About 80% of industry players worry about rising inflation and interest rates.

Singapore’s real estate sentiment weakened in the first quarter of the year (Q1) on the back of higher inflation, interest rates, and construction costs, according to an NUS Real Estate report.

The composite sentiment index fell to 4.9 from 5.8 in Q4 2025, whilst the current sentiment index declined to 4.9 from 6.1. The future sentiment index slipped to 5.0 from 5.5.

The Middle East crisis dampened property sentiment in Singapore, said Qian Wenlan, professor at NUS.

Rising inflation and interest rates were cited as the top risks, with 80% of respondents flagging them as a concern for the next six months, up from 11.8% in the previous quarter.

A global economic slowdown followed at 75%, whilst 65% pointed to rising construction costs. Another 60% flagged job losses or a decline in the domestic economy.

“While the residential sector shows structural resilience, macro headwinds are clearly weighing on broader commercial and industrial segments,” Qian added.

Residential property remained stronger than other sectors. Prime residential and suburban residential posted positive current net balances of 5% and 15%, respectively.

Business park and hi-tech space recorded a current net balance of -25%, followed by prime retail at -20%. Suburban retail and hotel or serviced apartment sectors both recorded -15%, whilst office fell to zero from 12% in the previous quarter.

For residential launches, half of the developers expected moderately higher unit prices over the next six months, whilst 40% expected prices to stay about the same.

Around 60% of developers expected the number of new residential launches to remain about the same, whilst 20% expected a moderately lower number.

Development costs remained a pressure point, with 90% of developers flagging building materials and land costs. Financing also drew more attention, with 60% citing it as an issue.