Lower interest rates and a stabilising economy, what does it mean for Singapore’s housing market?

As we move into 2026, Singapore’s housing market is undergoing a period of transition. This year, property prices are expected to see stable growth, in contrast to the significant price increases that we saw in the post-COVID period.

This moderation reflects the combined impact of government cooling measures, easing inflationary pressure, and a gradual increase in housing supply, particularly HDB flats that will reach the minimum occupational period (MOP) in 2026. With the introduction of these factors, we’re likely to see a 1-2% increase in annual property prices, signalling market stability rather than overheating. Interest rates are projected to bottom out in Q2 2026, which could stimulate increased buyer interest in the months ahead (Source: UOB).

What we expect in 2026

Public Housing

In 2026, approximately 13,480 HDB flats will reach 5-year MOP, almost double the 6,970 units that became available in 2025. A significant portion of these flats are located in high-demand estates such as Punggol, Queenstown and Tampines, with notable areas including Dawson and Bidadari.

This increase in resale-eligibility supply is expected to alleviate demand pressure in the HDB resale market, particularly in mature and well-connected towns. Combined with existing cooling measures, such as tighter loan-to-value limits and resale eligibility rules, price growth is likely to remain controlled rather than speculative.

Private Housing

From 2025, we see an ongoing trend of lowering borrowing costs. This is reflected by the falling of the compounded SORA benchmark to 1.22% in Dec 2025. This could indicate an improved affordability and sustained underlying demand, which contributes to a higher transaction volume.

However, growth is expected to remain restrained due to cooling measures such as ABSD, which will continue to limit investment-driven demand. With nearly 65% of new private housing supply located in the rest of central region (RCR), we are likely to see buyers become more price sensitive, reinforcing the trend towards moderation price appreciation rather than rapid escalation.

Private residential prices will thus rise steadily, with a projected 3% growth in annual prices.

What does this mean?

Overall in 2026, Singapore’s housing market is stabilising. We will see more resilience and steady growth as compared to massive surges. Slower rental growth and lower interest rates will ease costs for buyers and tenants.

With increased supply and financing costs projected to bottom out in Q2 2026, opportunities are opening up across both public and private housing, potentially drawing stronger buyer interest.