Home Prices in Singapore Are Finally Cooling and That Is a Healthy Sign

Today, buyers are behaving differently. Lower interest rates have helped ease mortgage costs, but financing is no longer the main consideration, especially since the three-month compounded Singapore Overnight Rate Average is now hovering around 1.1 per cent, down from its peak of about 4 per cent. Instead, households are placing greater emphasis on the longer-term outlook, asking not only whether they can afford repayments today but whether they can still cope if economic conditions deteriorate.

Slower hiring, geopolitical uncertainty and concerns about how artificial intelligence may reshape employment have all encouraged greater caution. At the same time, a larger pipeline of Build-To-Order flats, including projects with waiting times of three years or less, has given many first-time buyers an attractive alternative to paying peak resale prices.

The result is a market where buyers are becoming more selective. That is increasingly reflected in transaction volumes and prices. The resale volume of Housing Board flats in Q2 was 6,268 units, down 10.2 per cent from 6,981 a year earlier. In the private secondary market, the number of transactions was lower, year on year, every month from January to May 2026.

Those fears about a sharp correction are understandable but should not be overstated. Singapore’s housing market has historically been remarkably resilient because most owners are not forced sellers. Sale proceeds often finance retirement, right-sizing or replacement homes rather than speculative investments. Household balance sheets also remain healthy, providing a cushion against sharp price corrections.

Population growth, limited land supply and continuing household formation, including more singles purchasing homes and older households right-sizing, should continue supporting underlying demand even as lower birth rates moderate first-home demand over time. Births averaged about 48,000 a year in the 1990s, compared with about 39,000 in the 2000s.

Buyers are still prepared to commit when a project has the right location, pricing, design or future growth story. Pinery Residences sold 544 of 588 units at its launch weekend in March, at an average of S$2,546 per square foot. Tengah Garden Residences sold 853 of 863 units at its launch weekend in April, at an average of S$2,120 psf.

Since 2021, successive rounds of cooling measures, including tighter borrowing limits and higher stamp duties, as well as increased housing supply and changes to executive condominium rules, have collectively curbed speculative demand without triggering a sharp downturn.

Perhaps the biggest shift is psychological. During the post-pandemic boom, many buyers feared that delaying a purchase meant permanently pricing themselves out of the market. Today, that urgency is fading. Buyers have become more willing to wait, compare options and walk away if prices do not match value. That is a healthier dynamic.

The lesson for buyers is not to try timing the next upswing or hoping for a dramatic correction. Property remains a long-term commitment. The better approach is to buy when a piece of property genuinely meets one’s needs, the mortgage remains affordable even under less favourable conditions, and there is enough financial flexibility to absorb unexpected shocks.