1. How does the US trade tariff situation affect Singapore’s property market?

Following the U.S. announcement of an upward revision of trade tariffs and tit-for-tat retaliation from China, we saw the stock market plummet across major financial markets. But many stock markets, including Singapore’s, gained some ground after the U.S. announced a temporary pause on tariffs on 9 Apr. 

The ongoing tiff between China and U.S. has created much uncertainty in the market, and world is still calibrating their reactions from these series of events.

We all know the stock market can be quite volatile, and most people go into it with a short- to mid-term mindset. But real estate – especially in Singapore –is a different game. It’s a long-term play, and there’s a lot less speculation involved.

Right now, we’re seeing extreme volatility in the stock market. But unlike equities, properties are less liquid and property owners cannot buy and sell their properties like trading stocks. 

Therefore, the property market is not like the stock market. It is not volatile and homeowners tend to hold onto their properties for the longer term,  which helps keep the property market stable during uncertain times.

2. What impact will the tariffs have on the Singapore real estate market over the short term and long term?

Even though there’s still quite a bit of uncertainty, Singapore’s property market is backed by firm economic fundamentals and continues to offer growth opportunities for investors who take a medium- to long-term perspective.

So yes, the lower baseline 10% tariff is only expected to have a measured direct influence on Singapore. However, in the short term, said impact could intensify due to heightened uncertainty resulting from the escalating trade war.

This will in turn affect Singapore’s economy, since we rely heavily on international trade.

But here’s the good news—Singapore has a diversified economy and a strong network of trade partners that can help cushion the impact. 
The government has been proactively laying the groundwork to drive long-term economic growth and job creation – two key demand drivers in our thriving residential market.

3. Do you see the tariff hikes impacting construction costs, and hence, property prices?

Let’s consider this scenario:  If U.S. demand for Chinese construction materials dips due to the tariffs, this may lead to China diverting excess supply into the region, thus leading to cheaper imports. In the event of such an outcome, lower-cost materials could trigger substantial deflationary pressures across the region.   

Take steel, for example. With the slowdown in China’s property sector, domestic demand for steel rebar has dropped, and prices have already softened. Add the U.S.’s 145% tariff on Chinese imports into the mix, and it creates the perfect storm – where demand for Chinese steel in the States is dampened further. 

Hence, with rising tensions and both the U.S. and China imposing historically high tariffs on each other, there are now higher odds that China might push even more low-cost exports into the region. 

Now instinctively, some may assume that falling building material prices may lead to lower construction costs, and hence, cheaper homes. However, we instead believe that housing prices will hold firm, despite these shifts.

This because in Singapore, property prices are influenced by multiple factors, such as land costs, labour costs, professional fees, taxes like property tax, stamp duties and developer ABSD, and of course, interest rates.

4. What impact will the tariffs have on market sentiment?

There’s definitely a lot of uncertainty in the market right now—you can see it in how global stock markets have reacted. But that is largely a knee-jerk reaction to all the volatility we’ve seen over the past few days.

When it comes to the property market, things are a lot more stable. Homebuyers here tend to take a longer-term view, and most are purchasing properties based on genuine needs, not speculation.

Sure, negative sentiment from the financial markets may have spilled over into the property scene, with some buyers playing the waiting game and putting their purchases on hold – but this is temporary.

If homebuyers and owners hold a mid- to long-term outlook, there’s no major cause for alarm. Or in other words, our local property market is still calm, rational, and grounded in real demand.

Even supposing that stagflation becomes a real risk for the U.S. due to higher inflation and decreased consumer spending, the impact of such a black swan event are likely to be softened.  

Over the past two decades, interventions by world governments have often cushioned the impact of significant global events, such as the Russian-Ukrainian war, COVID-19, and the Great Recession of 2007-2009.

5. How do the tariffs influence foreign investment into residential real estate in Singapore?

Singapore has earned its reputation as a safe and stable market, which places us in a good light in the eyes of foreign investors looking for safe and long-term growth opportunities. 

This will support economic growth and job creation, which are crucial in supporting local housing demand.

Should more companies set up or expand their businesses in Singapore, this could also increase demand for residential properties. That said, the 60% ABSD rate is expected to continue keeping foreign buying activity cooled.

On the ground, we expect most developers to proceed with pre-planned launches. This likely the case as our property market has been historically resilient, even during times of global uncertainty.

Moreover, with demand in Singapore largely driven by genuine homeownership needs –and not speculation – this support from domestic buyers  will continue to keep the market steady.

Within the luxury property segment, investment activity is typically less susceptible to market volatility, as buyers in this bracket have stronger holding power. In fact, we might even see more interest from newly-minted affluent citizens or PRs who are looking for wealth preservation opportunities amid uncertain times. 

6. How about foreign investment in commercial office spaces, or industrial warehouses?

Singapore’s strong position as a global financial hub, along with our robust legal framework, makes us even more attractive during uncertain times.

For investors looking for a safe haven and long-term growth, Singapore continues to stand out. Our political stability and open economy gives them confidence, and that could help drive continued demand for commercial and industrial properties here.

Foreign direct investment also plays a big role in our economy, and we expect it to continue supporting growth and creating opportunities across the real estate sector. 

7. How do cooling measures interact with these external pressures?

From 2010 to 2024, the Singapore government rolled out 13 rounds of cooling measures to keep the residential market stable and price growth sustainable.

These most recent measures included the significant 60% Additional Buyer’s Stamp Duty (ABSD) implemented in April 2023, targeting speculative investment from foreign buyers. 

Additionally, the higher Additional Buyer’s Stamp Duty (ABSD) on second homes is intended to discourage accumulation of multiple properties, helping to stabilise home price growth and maintain market stability. 

All of this contributes to sustaining the intrinsic value of residential properties in Singapore. 

The government has always taken a practical, forward-looking approach by calibrating housing supply to meet demand, while also discouraging excessive accumulation and curbing speculative activity. 

Thanks to these proactive steps, Singapore now has the flexibility to unwind some of the implemented cooling measures and respond quickly if external shocks, like global trade tensions, begin to impact the market.

8. How do the tariffs affect global trade flows and indirectly impact Singapore’s sectors?

The aggressive tariff move by the US could trigger retaliatory actions from other countries. China, for instance, has already hit back at Trump tariff hike with a 125% levy on all U.S. goods.

As the trade war intensifies, the global economy is likely to feel the pressure, and given how trade-dependent Singapore is, we are not immune to that impact either.

That said, Singapore’s diversified economy and broad network of trade partners has put us in a better position to ride out these shocks.

The ‘China Plus One’ strategy was previously a common tactic used by companies to diversify their manufacturing hubs beyond China; this involved establishing secondary production facilities in other countries. 

With the ‘China Plus One’ strategy facing disruption by the US trade tariffs, regional low-cost manufacturing hubs could struggle.

But Singapore’s reputation as a trusted, open, and stable economy might actually attract more investors and companies looking for more stable ground – especially in the commercial and industrial space.

9. Can Singapore’s strong fundamentals buffer against negative impacts?

What keeps Singapore’s property market so resilient? It really boils down to strong fundamentals – like political stability, a robust financial system, our strategic geographical location, low unemployment rates, and sound governance.

We also possess a wide network of trade agreements, great infrastructure, and a highly educated workforce to draw in foreign investors. 

All of this provides a firm foundation for long-term economic growth and job creation, which naturally supports demands for property.

10. What's your outlook for the market in the medium term, and any scenarios to watch?

At ERA, we’re still optimistic about Singapore’s residential market over the medium- to long-term, even as current global events continue unfolding.

A lot of that confidence comes from the solid groundwork our Government has already put in place: extensive trade agreements, world-class infrastructure, and a stable macroeconomic that keeps attracting investors.

When it comes to housing, the government has always taken a pragmatic approach, including the cooling measures, increasing housing supply, and ensuring long term sustainability.

With the right policies and actual demand driving the market, we believe Singapore’s property sector will stay resilient and offer long-term value for both homeowners and investors.

It’s worth keeping an eye on how the trade war unfolds, especially if there are more retaliatory measures that could shake up global supply chains. Optimistically, a positive development would be if the U.S. and China come to the discussion table. 

At the same time, how the U.S. Federal Reserve reacts to inflation and growth pressures via rate cuts could also have an impact here in Singapore, especially when it comes to mortgage rates and home financing. 

For instance, should the Fed’s benchmark rate falls, borrowing costs in Singapore could follow suit.