Property market turns pessimistic amid Middle East crisis: NUS
Study results suggested 50% of developers expect greater costs for brand-new household release for the following six months, while 60% anticipate start volumes to hold firm, supported by resistant customer demand.
Both the current and future view indices tumbled in 1Q2026. The previous contracted to 4.9 from the previous quarter’s 6.1. The last slid to 5.0 from 5.5 in the preceding quarter.
Belief also decreased in the retail and hospitality real estate markets. The prime retail and suburban retail segments logged current net equilibriums of -20% and -15% for 1Q2026, whilst the hotel and serviced apartment segment had a present net equity of -15%.
“With the Composite Index slipping beneath the neutral threshold, it is clear that the industry is shifting from an expansionary mindset to one of protective consolidation as companies change into a ‘risk-off’ position,” states Qian.
International political headwinds are casting a shadow over Singapore’s real estate market, according to the latest Real Estate Sentiment Index (Resi) presented by the National University of Singapore (NUS). The Composite Sentiment Index dipped to 4.9 in 1Q2026, from 5.8 in the last quarter.
Still, the residential home market remains secure, with participants mirroring determined assurance in the suburban household market. Throughout all property segments, suburban property topped the listing with a positive existing web equilibrium and future internet balance of +15% each.
Offices fared fairly better. Whilst the industry’s current net balance slipped to 0% from the 12% in 4Q2025, low Grade A vacancy and a constrained upcoming supply pipeline are expected to bolster this sector, mirrored in a favorable future overview of +15%.
Nevertheless, belief in the prime residential market has softened. While the segment secured a positive current final balance of 5% in 1Q2026, the number is a noticeable decline from the 41% logged in the former quarter. “The prime residential field is naturally a lot more conscious shifts in global funding and worldwide buyer sentiment,” mentions Qian.
Generated by NUS’ Department of Real Estate and Institute of Real Estate and Urban Studies (Ireus), the Resi tracks impressions and expectations of the property industry via quarterly surveys of senior execs in Singapore realty firms.
Teacher Qian Wenlan, director of the NUS Ireus, attributes the gloomy turn in the industry to macroeconomic headwinds originating from the conflict occurring in the Middle East. “The ongoing disaster in the Middle East– with its cascading effects on rising power charges, consistent inflation, and raised rate of interest– has dampened property sentiment here in Singapore,” she explains.
Across commercial and industrial sectors, beliefs extensively declined. The business park and hi-tech room market led this downturn, posting a current web balance of -25% and a future net balance of -20%.
It comprises a Current Sentiment Index and a Future Sentiment Index, which record adjustments within the past 6 months and the next six months, respectively. Scores from both indices are aggregated to obtain a Composite Index, which shows total market belief.
