Could Singapore Property Prices Double by 2040? Uncovering the Market's Long-Term Fundamentals

DBS: Singapore Private Home Prices Could Cross $4,000 PSF by 2040 Amid Steady Long-Term Growth

If you think private home prices at over $2,000 per square foot (psf) are already out of reach today, the definition of "expensive" may need to be completely rewritten in 15 years.

According to a recent report by DBS Group, the average price of private residential properties in Singapore could surpass $4,000 psf by 2040—effectively doubling from current levels.

Forecast: Private Home Prices to Hit $3,500–$4,050 PSF Within 15 Years

In its report, DBS Group Research noted that backed by a stable economy, continuous population growth, and robust governance, Singapore's real estate market is set to maintain a long-term compound annual growth rate (CAGR) of 2% to 3% over the next 15 years.

They estimated: "Assuming home sizes remain stable, the overall average price of private homes will reach $3,500 to $4,050 psf by 2040."

This indicates that private residential property prices in Singapore could potentially double within the next decade and a half.

Prudent Government Control + Population Growth = Long-Term Resilience

The report highlighted that 97% of property buyers in Singapore are citizens, providing an exceptionally solid foundation of domestic demand that insulates the market from speculative swings and external shocks.

At the same time, the government encourages permanent residents to plant roots long-term, making homeownership a vital pathway to social integration.

Under the Draft Master Plan 2025 released by the Urban Redevelopment Authority (URA), 130,000 new homes are slated for development over the next 10 to 15 years. DBS projects that Singapore may need to build an additional 200,000 to 300,000 housing units by 2040.

This new supply will primarily stem from rejuvenation plans in Orchard and Marina Bay, as well as new regional developments driven by the decentralisation strategy (such as Changi, Jurong Lake District, and Tengah)—pointing to substantial room for growth across the property and construction sectors.

Current Market Snapshot: Non-Landed Private Home Median Price at $2,139 PSF

Data from OrangeTee & Tie reveals that the median price of non-landed private homes stood at $2,139 psf in the first three quarters of 2024.

Breaking this down:

New private homes: $2,490 psf

Resale private homes: $1,741 psf

Sub-sales: $2,092 psf

Reaching DBS's forecast of $4,000 psf points to a steady, progressive climb over the next 15 years rather than an uncontrolled speculative bubble.

Expert Views: Realistic Forecast, Though Variables Remain

DBS's projection is "by no means impossible" due to several key factors:

Singapore's population has reached 6.11 million; while the population is ageing rapidly, an influx of foreign PMETs and professionals continues;

Median household incomes continue to rise, underpinning healthy home purchasing power among residents;

The government maintains vigilant oversight of home prices to prevent market overheating.

Even if property prices rise, as long as wage growth keeps pace, homes will remain affordable for buyers. Nonetheless, any forecast spanning over a decade carries macroeconomic uncertainties—such as global economic cycles, policy shifts, and demographic changes—which could all influence the trajectory of growth.

Investment Perspective: Developers and Construction Stocks Stand to Benefit

DBS analysts believe this long-term growth potential will not only benefit homebuyers and investors, but could also drive share prices higher for property developers and construction-related firms.

They recommend keeping an eye on:

Developers: UOL Group, City Developments Limited (CDL), GuocoLand

Construction and supply chain players: Hong Leong Asia, Pan-United

Workers' dormitories and accommodation providers: Centurion Corporation, Wee Hur Holdings

However, they also caution that elevated construction costs and project completion pressures could place a cap on profit margins, while market confidence may also be swayed by broader economic headwinds.

Stability Remains the Defining Hallmark of Singapore Real Estate

Looking back at price movements over the past two decades, Singapore's property market has weathered multiple global crises and policy interventions, yet has consistently charted a path of steady, upward appreciation.

Ultimately, DBS's report is more than just a numerical forecast; it represents a resounding vote of confidence in the city-state's governance and economic resilience.

A price point of $4,000 psf is not merely a market target—it is an enduring endorsement of the "Singapore model".