Despite the uncertain economic outlook, the retail property market continued to show positive momentum in the third quarter of 2022.
Rents in all three districts increased from the previous quarter, with Orchard Road and Segers Road in particular seeing the highest rent increases of nearly 3% from the previous quarter.
With the gradual liberalization of tourism restrictions in Singapore, the retail sector is gaining momentum as the number of tourists increases.
In addition, Singapore has begun to host globally recognized events such as the recent Formula 1 Grand Prix, which attracted the largest crowd in years, contributing to sustainable retail growth.
The outlook for retail rents is positive as older retail projects are revamped and more experiential retail projects are added to the mix.
In the third quarter of 2022, total investment in the real estate market declined by almost 40% from the previous quarter , totaling S$5.51 billion.
The residential sector had the highest investment at S$3.43 billion, accounting for 62% of the total investment, and was the highest investment real estate segment in the quarter.
Of these, just three lots launched on the market by the government, Lentor Central, Lentor Hills Road and Bukit Batok West Avenue 5, saw total sales of $1.1 billion.
Overall, with the slowing economy and rising cost of living and interest rates, housing market prices are now approaching an inflection point.
Considering a variety of factors such as the government issuing new cooling measures, real estate price increases are expected to reach about 9% in 2022 and slow to 1-3% in 2023.
Nonetheless, property developers will not be under much pressure to cut prices, especially for projects with a limited number of unsold units.
The Singapore government's recently announced foreign talent program such as the Top Professional Pass to attract top talent will stimulate housing and rent demand.
In the office market, office occupancy in the CBD rose 1.3% YoY to 95.1%.
Due to tight supply, prime office rents in the CBD are expected to increase by 6% and Grade A office rents are expected to rise by 9%.
More office buildings will have more flexible use of office space, more sustainable design, and increased smart technology to meet growing demand.
