The residential market performed well in 2006 with greater price increases and a surge in sales activity compared to 2005. The Urban Redevelopment Authority’s (URA) real estate statistics show that in 2006, prices of private residential properties increased by 10.2%, compared with the 3.9% increase in 2005. The increase in prices was led by private apartments in the prime districts of Districts 9, 10, 11, Downtown Core and Sentosa Cove which increased by 17% y-o-y. Private apartments within the rest of central region and outside the central region rose 3% and 4.2% y-o-y respectively. Developers sold a total of 11,147 uncompleted and completed units in 2006 compared to 8,955 units in 2005.

The recovery in the Singapore residential market was led by the luxury and high-end projects in the traditional prime districts (9-11) and the central districts (1-4). Price increase was significant in new residential hotspots such as Sentosa Cove, Marina Bay and the traditional Central Business District. Among the foreign homebuyers, nationals from UK, USA, Hong Kong, Indonesia, Korea and Australia were found to be more active in the high-end market as compared to the rest of the island. The mid-end sector has also risen in price, with several sellout projects.

Demand for residential property is expected to remain strong in 2007 given the forecast of almost full employment, strong economic growth across the various sectors, low interest rate environment, and a remaking of Singapore economy to broaden the growth engines. New supply is not expected to be large as enbloc sites sold will deplete existing units which will absorb new launches. So far enbloc sites sold in the last 2 years will supply approximately 8,000-9,000 units.


An improvement in business conditions amidst a supply crunch led to a strong recovery for both office rents and prices. Based on URA’s real estate statistics, prices of office space increased by 17% and rentals rose 30.3% for the year 2006. New completions such as One Raffles Quay and Parakou Building contributed to approximately 1.4 million square feet of office space. Driven by continued demand from the financial and professional services sectors, prime rents have breached the last peak of $8.15 per square foot per month in 2001 and rose 62.7% y-o-y to $9.60 per square foot per month, according to data provided by Jones Lang LaSalle. Current average rent for Prime Grade A space is only 7.7% and 13.9% away from the 1996 and 1991 peaks respectively. Current average price for Prime Grade A space also rose by a significant 66.7% y-o-y to $1,700 per square foot. Property consultants predict annual demand will range from 2 to 2.5 million square feet compared with the limited supply till 2011 and beyond.


The year 2006 saw an influx of new quality space in the retail sector that has predominantly enjoyed high occupancy levels of approximately 95%. Total new completions for the year amounted to 1.77 million square feet, the highest in the decade. Take-up for the entire year is approximately 1.4 million square feet. While this was largely due to the completion of VivoCity (1.1 million square feet), several niche malls also added excitement to the retail market such as Velocity @ Novena Square (70,000 square feet). Current average rent for Prime Grade A retail space is $39.50 psf per month, a 4.6% increase compared to a year ago.

Shoppers will continue to be provided with greater choice as another 1 million square feet of retail space is expected to be completed in 2007. These include AMK Hub (200,000 square feet), Square 2 (135,000 square feet), Central (210,000 square feet) and Pasir Ris Entertainment Centre (160,000 square feet).


The Singapore Tourism Board (STB) announced that the tourism sector generated an estimated $12.4 billion in tourism receipts in 2006, exceeding the target of $12 billion and posting a double digit growth of 14.5% over 2005. This is a new record for the tourism sector. Singapore also set a new high of 9.7 million visitor arrivals in 2006, exceeding its target of 9.4 million and posting an increase of 9% over 2005. According to STB projections, tourism arrivals are expected to hit 17 million by 2015.

A combination of tight supply and buoyant demand drove up occupancy rates towards 84% and allowed hotel operators to raise their average room rates to $164 compared to $136 in 2005.