Property market turns pessimistic amid Middle East crisis: NUS
Offices fared relatively better. While the market’s existing net balance slid to 0% from the 12% in 4Q2025, low Grade A vacancy and a constrained upcoming supply pipeline are expected to bolster this section, reflected in a positive future overview of +15%.
Nevertheless, belief in the prime housing market has softened. While the sector secured a positive current net balance of 5% in 1Q2026, the number is a labeled decrease from the 41% logged in the former quarter. “The prime residential sector is inherently extra conscious changes in global funding and international buyer sentiment,” mentions Qian.
Both the current and future sentiment indices fell in 1Q2026. The past contracted to 4.9 from the previous quarter’s 6.1. The last slipped to 5.0 from 5.5 in the preceding quarter.
Generated by NUS’ Department of Real Estate and Institute of Real Estate and Urban Studies (Ireus), the Resi tracks impressions and assumptions of the real estate industry with quarterly studies of senior executives in Singapore real property companies.
Professor Qian Wenlan, director of the NUS Ireus, attributes the depressed turn in the market to macroeconomic headwinds stemming from the dispute occurring in the Middle East. “The continuous disaster in the Middle East– with its plunging results on surging power costs, relentless inflation, and high rate of interest– has actually dampened property view right here in Singapore,” she explains.
Study results suggested 50% of property developers anticipate higher costs for brand-new property launches for the next six months, whilst 60% anticipate start quantities to hold firm, supported by resilient purchaser demand.
Belief also decreased in the retail and hospitality real estate markets. The prime retail and suburban retail sections logged current net balances of -20% and -15% for 1Q2026, while the hotel and serviced apartment segment had a current net balance of -15%.
Still, the domestic housing industry remains stable, with respondents showing gauged assurance in the suburban non commercial market. Across all realty sections, rural residential topped the listing with a positive current web equilibrium and future internet equilibrium of +15% each.
International political headwinds are casting a shadow over Singapore’s real property market, according to the most recent Property Sentiment Index (Resi) published by the National University of Singapore (NUS). The Composite Sentiment Index plunged to 4.9 in 1Q2026, from 5.8 in the last quarter.
“With the Composite Index sliding beneath the neutral threshold, it is clear that the market is shifting from an expansionary mindset to among defensive consolidation as organizations change into a ‘risk-off’ standpoint,” states Qian.
It comprises a Current Sentiment Index and a Future Sentiment Index, that monitor changes within the prior 6 months and the next six months, respectively. Scores from both indices are accumulated to obtain a Compound Index, which indicates general market sentiment.
Across business and industrial sections, beliefs generally decreased. The business park and hi-tech area market led this downturn, publishing an existing internet balance of -25% and a future net balance of -20%.
