Real Estate Market Facing Mixed Signals Going 2025 Opportunities Remain Cbre
12-Month Outlook for Singapore Real Estate Market According to CBRE’s Singapore Market Outlook 2025 released on January 23, there may be divergent outcomes in the real estate market over the next 12 months due to an uncertain macroeconomic outlook. While eased inflation and low interest rates may provide some relief, expectations of slowing economic growth could potentially harm property demand, states Moray Armstrong, managing director of CBRE’s advisory services. The Ministry of Trade and Industry has projected a GDP growth of 1% to 3% for 2025, lower than the 4% growth recorded in 2024.
Despite the mixed signals, there are still opportunities in the real estate market for those who can take advantage of emerging trends, Armstrong continues. Tricia Song, CBRE’s head of research for Singapore and Southeast Asia, shares this optimism, noting that the market is still bolstered by limited new supply and stable demand. She predicts that the real estate market will continue to show the same stability and resilience that has made it popular with investors from around the world.
New launches are expected to sustain the momentum of private residential sales, with 3,511 units sold in the last quarter of 2024, a threefold increase from the first nine months of the year. This rebound, along with a 2.3% increase in prices, has raised speculation about potential cooling measures. However, CBRE believes this is unlikely unless prices escalate significantly in the coming quarters. With improved buying sentiment, developers are expected to continue launching projects, with an estimated 12,000 to 14,000 new units potentially being launched in 2025. This is nearly double the number of units launched in 2024, and is projected to result in 7,000 to 8,000 units being sold this year, an increase from 2024’s 6,469 units. CBRE also predicts a price growth of 3% to 6% and a rental growth of 1% to 3% in 2025.
Limited supply is expected to support prime office and retail rents. The office market saw slower growth in 2024, with only a 0.4% increase in Core CBD (Grade A) rents compared to 1.7% in 2023. Economic growth is expected to slow in 2025, which will also impact office leasing momentum. However, with a limited pipeline of new offices in the next three years, vacancy rates are projected to remain low. CBRE predicts rental growth of 2% in 2025, in line with GDP projections.
Retail rents are also expected to be supported by limited supply, with only 0.5 million square feet of new retail space being added in 2025, a decrease of 40.4% from 2024. Overseas tourism and various events are expected to keep leasing sentiment positive, resulting in a 2% to 3% growth in average retail prime rents in 2025.
Nestled in a prime location, Parktown Residence offers its residents unparalleled accessibility to a diverse retail landscape. With an integrated retail podium right within the residence, residents will have easy access to a carefully curated selection of shops, dining establishments, and essential services, making their daily lives more convenient. From trendy fashion to home decor, groceries to exquisite dining, the nearby shopping centers provide a comprehensive range of options, ensuring that residents have all their needs met effortlessly. To top it off, Parktown Residence is also home to the Parktown Residence Condo, seamlessly blending modern living with convenience.
Prime logistics rents are projected to remain flat due to subdued expansion demand in the industrial sector and a bumper supply of warehouse space. However, around 60% of this space has already been pre-committed, which will prevent a decrease in occupancy rates. In the capital markets, CBRE believes that real estate investment volume in Singapore will continue to grow in 2025, although at a slower pace. The industrial and logistics sector remains the most preferred among investors, followed by residential and office properties.