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Myth-busting Series 2.0 (Part 2): Where are the Buyers?

Continuing our myth-busting series, today we shall touch on the topic of "where are the buyers?" This has been a question we have faced by many of our clients. They fear because media reports have been showing a weak demand and take-up in recent times...is it really though?

Remember that even with the existing and new cooling measures in placed, the private property market still increased 7.9% for 2019. Now you might be thinking, "but what about the future leh?"

Lets examine the facts and figures deeper, mainly the long-term demand drivers. *WARNING: Long post ahead; But do read on, as it may concern your future*


In the 2013 White Paper Population report, the government had made plans to support a country of 6.5M~6.9M population by 2030. Based on this projection, Singapore Citizens (SCs) will make up 3.6M~3.8M, Permanent Residents (PRs) will make up 0.5M~0.6M, and the rest (2.4M~2.5M) will be Foreigners (FRs).

Currently our total population sits at 5.64M (2018), which means in 2030 an additional 1 million people will be living in Singapore. Our current SC population is around 3.47M people, an increase of 30,000 since 2017, mainly driven by births and new citizens. The resident total fertility rate, has been declining. It fell from 1.20 in 2016 to 1.16 last year - the lowest in seven years. The rate needed to replace the population is 2.1.

Even if we assume a 30,000 live births for the next 12 years, it only totals up to 360,000. Which is far from the 1 million additional people......Where are we gonna get the remaining people from?

This would strongly imply the need to open our city to immigration flow once again to support a healthy GDP growth. This brings me to our first driver for demand.

(i) Foreigners can't buy HDB, so their only other option is to rent or buy private properties. Both of which are drivers to push the private property prices even higher! Remember back in 2010, 2011, when there was a surge of foreigner demand, and supply was low? What happened to the prices?

(ii) New Household Formation by the from new immigration inflows. We can safely assume a need for a newer, more specialized talent pool, some of them might want to set up a home in Singapore. As of 2018, the number of transnational marriages (marriage between non-citizen and SC) hit 35%.

(iii) HDB Upgraders have been increasing in number. Based on the current statistics, the percentage of people staying in HDBs has decreased, while that of people staying in condos has increased.

Based on an analysis done by DBS, an estimated 17,000~19,000 HDB flats will reach their Minimum Occupation Period (MOP) over the next 10 years. Assuming that 35% of these units will be upgraders, that's an average of 6,000 units of demand per year over the next decade!


Foreign buyers having been steadily growing in numbers, with the mainland Chinese buyers forming the majority. The mainland Chinese buyers also have a higher purchasing power, only 2 per cent of the units purchased by them in 2009 cost more than S$5 million. In 2017, this proportion grew to about 4.4 per cent.

This is especially so for the high-end, super luxury homes.

"Why are foreigners willing to pay more ABSD and buy Singapore properties? Siao ah?"

(i) Singapore is a Safe Haven for Investors. We are politically stable and financially strong, two important factors investors look at to park their money. In Singapore, government seizures or property damage from riots is highly unlikely. All these appeal to investors are safe, brick-and-mortar assets that they can safely guard their wealth...especially during times of uncertainty.

(ii) Singapore properties are undervalued compared to the world. Among the major cities in the world, Singapore has one of the lowest home-to-income ratio for properties.

Our property market here has under-performed compared to other global countries. But are we really in such a bad shape?

Answer is NO! In fact, Singapore's GDP has been steadily growing. We are unlike Britain which in facing trouble with Brexit and issues with the European Union (EU). We are unlike France which is facing economic problems and a falling GDP. We are unlike U.S and China which are currently stuck in a trade war.

"Then why are we under-performing?"

Reason is that our government has been proactive to implement measures to allow steady growth of the private property market, without a dangerous bubble forming.


For the sake of time (and not to bore you), we shall leave you with you two major groups of demand above. We have only touched on pretty briefly about the demand drivers in the market today and future, if you'll like to know more to further your property decision, please get in touch with us.

We have plenty of charts and data, and insights to share based on our deep experience and knowledge in property. Don't make a decision without first getting a second expert opinion. Just like you need a doctor for health, you need a specialist to cross-examine your property decisions too!

Many Thanks

Teo Duo Property

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