What is the approximate annual growth rate of private property prices in Singapore? This is certainly a very important criterion in determining whether private homes in Singapore are worth buying and investing in.

How much have house prices in Singapore risen over the years?

In the last year alone (2022), the overall price of private housing in Singapore has increased by 8.6% (data released in January this year).

In fact, based on official government data and press reports over the years, the annual growth rates of private property prices in Singapore over the past five years are listed below:

2018 - 7.9%.

 2019 - 2.7% (due to the impact of the Singapore government's property cooling measures, the rate of increase is not as high as in previous years, but it is still an increase).

2020 - 2.2% (due to the negative impact of the epidemic, the rate of increase is not as high as previous years, but still an increase.)

2021 - 10.6%.

2022 - 8.6%.

In fact, Singapore's property market has been experiencing significant price increases each year, and the increase during the epidemic (the last two years) has been particularly impressive.

This is a reflection of the resilience of the Singapore property market and the strength of its market fundamentals. In an environment where prices in major cities around the world fell almost across the board during the epidemic and the market was generally in a state of decline, Singapore's housing market surprisingly went against the odds and rose sharply (in terms of both prices and volume), The world is watching.

So much so that the Singapore government had to introduce emergency cooling measures to stabilise the housing market twice, the year before and last year, when prices were growing at or near 10% per annum!

If we add up these five years of increases, we get a total of 32%, which, if we do a simple calculation, means that the average annual growth rate is 6.4%. If we do a more precise calculation, based on the compounded rate of increase for these five years, the average compounded annual growth rate is 6.347%, which is very little different from the average annual growth rate mentioned earlier and can be considered almost the same.

It is worth noting that according to government data, the private property price index in Singapore has risen significantly from 588 points in 2003 to 2040 points in the first quarter of 2023, representing an overall increase of 247%, and the actual annual compound growth rate of local private property prices over the past 20 years calculated on this basis happens to be 6.4%!

Even if we shorten the time frame and just focus on the price trend from 2019 to the first quarter of this year, the overall private property price in Singapore has increased from 148.6 points to 194.6 points, and the calculated annual CAGR of private property price in Singapore for the past 17 consecutive quarters is even higher at 6.55%!

The purpose of the preceding elaborate explanation based on actual calculations is only to demonstrate that, given the realities of the Singapore housing market, an average annual growth rate of over 6% in private property prices in Singapore should be quite accurate and reliable, and not problematic.

Such an average annual growth rate should be considered quite impressive in a market environment where national income is generally very high (i.e. the ratio of property prices to per capita income is relatively low), the property bubble index is very low, and the government is striving to maintain a steady and healthy growth in property prices over time through various regulatory measures.

If you translate this into real house prices, what does this mean? Here is a simple example.

If a buyer had bought a new home at S$1.5 million in early 2018, even at a conservative 6% estimate, that home would have enjoyed a significant appreciation in value of just over S$500,000 as at the end of last year, based on the actual annual private house price inflation rate alone!

However, in the context of the overall market situation, it is important to emphasise that these high and significant appreciation rates are more likely to be seen in older resale condominiums that are still under construction and not yet completed, or in newer resale condominiums that are of a younger age and of a more popular architectural design.

As for older resale flats, there are many factors involved (mainly depending on the opening price of the project when it was first introduced to the market and its price trend in the long term resale phase, which in turn depends on the nature of the property and many of its characteristics, including location, size of the plot, size of the community, amenities and facilities in and around the park, popularity with buyers and tenants, etc.). (the popularity of the property with buyers and tenants, etc.)

As a result, the long-term price trend and appreciation is often more complex than for new homes, depending on the specific circumstances of individual developments, and it is difficult to make generalisations.

That said, back in April 2017, Morgan Stanley claimed in a research report that prices in Singapore would double by 2030 (the author of the report used a positive rather than a consultative tone)!

On the face of it, such a bold prediction may seem a little unbelievable, or even plausible.

However, having done some realistic calculations, based on a 13-year time horizon (2018 to 2030) and a relatively more conservative compound annual growth rate of 5% (note: the previous reliable conclusion was actually more than 6%, somewhere between 6.3% and 6.5% to be exact), the result is, it must be said, that the so-called Singapore "doubling (or nearly doubling) of (private) property prices" in Singapore is really not nonsense!

However, no matter how much private property prices in Singapore have risen over the years and how much more they are expected to rise in the future, as long as a potential buyer does not enter the market in time to purchase a home before it is too late, but chooses to remain an onlooker, he will remain an irrelevant onlooker, unable to participate directly and actually benefit from the development of the market and the general rise in private property prices. This is indeed a great pity.

Most buyers (both Singaporeans and foreigners) do not really understand the realities of the Singapore housing market and think that they have plenty of time to wait and watch, thinking that they might be able to wait for the much anticipated day when prices come down ...... but the reality is harsh and the reality is that The reality is that such waiting often comes at a price.

This is because, since 2013, the government has introduced a major 'killer' measure that effectively limits buyers' ability to buy - the Total Debt Servicing Ratio (TDSR) and a further increase in the Additional Buyer's Stamp Duty (ABSD). （Since the introduction of the government's major "killer" measures to effectively limit buyers' ability to buy - the Total Debt Servicing Ratio (TDSR) and further increases in the Additional Buyer's Stamp Duty (ABSD) - the Singapore housing market has stabilised and overall private property prices have been rising steadily since 2017 (except for a slight dip for a quarter or two whenever a new housing policy is introduced, followed by a climb), with few of the ups and downs seen before the government's entry in 2010. Even during the epidemic period of the last two to three years, prices have not fallen, but have risen sharply.

Therefore, it seems unlikely that prices will one day suddenly come down as many buyers are hoping and longing for, and frankly, such a dream is not very realistic.

Considering the fact that land resources in Singapore are ultimately limited and valuable, and based on the fact that the price of private housing in Singapore has been rising in tandem with the rising price of land, whether it be government land sales or collective sales of existing projects.

The basic strategy is to "buy and wait" rather than "wait to buy". (wait until you have made enough money, raised enough funds and got the timing right before you enter the market to buy), thus wasting precious time and missing out on a great opportunity, which is a great pity. In the world of property investment, time is money!