Property market turns pessimistic amid Middle East crisis: NUS
“With the Composite Index sliding beneath the neutral threshold, it is clear that the sector is changing from an expansionary mindset to one of defensive consolidation as services change into a ‘risk-off’ stance,” says Qian.
Both the present and future view indices dropped in 1Q2026. The previous contracted to 4.9 from the previous quarter’s 6.1. The last slipped to 5.0 from 5.5 in the preceding quarter.
Study results shown 50% of developers expect greater costs for new property start for the following six months, whilst 60% predict start volumes to hold firm, supported by resilient purchaser demand.
Still, the domestic houses industry remains secure, with respondents showing determined assurance in the suburban non commercial market. Across all property sectors, rural non commercial covered the listing with a positive present web balance and future net balance of +15% each.
Throughout business and industrial sectors, sentiments broadly decreased. The business park and hi-tech area market led this downturn, publishing an existing web equilibrium of -25% and a future net balance of -20%.
Nevertheless, belief in the prime residential market has softened. Whilst the sector held a favorable current net balance of 5% in 1Q2026, the figure is a labeled decline from the 41% logged in the last quarter. “The prime residential industry is naturally a lot more conscious changes in global funding and international buyer notion,” indicates Qian.
It makes up a Current Sentiment Index and a Future Sentiment Index, that monitor adjustments over the previous six months and the next 6 months, respectively. Scores from both indices are aggregated to obtain a Composite Index, which suggests general market belief.
Professor Qian Wenlan, director of the NUS Ireus, connects the pessimistic shift in the industry to macroeconomic headwinds stemming from the conflict occurring in the Middle East. “The continuous crisis in the Middle East– with its cascading results on rising energy charges, persistent inflation, and raised rate of interest– has actually dampened property sentiment right here in Singapore,” she explains.
Offices fared relatively better. Whilst the market’s present net balance slid to 0% from the 12% in 4Q2025, low Grade A vacancy and a restricted upcoming supply pipeline are expected to boost this sector, mirrored in a favorable future outlook of +15%.
Sentiment also fell in the retail and hospitality real estate markets. The prime retail and suburban retail sectors logged current net equilibriums of -20% and -15% for 1Q2026, whilst the resort and serviced apartment segment had a current net balance of -15%.
Made by NUS’ Department of Real Estate and Institute of Real Estate and Urban Studies (Ireus), the Resi tracks perceptions and assumptions of the real estate industry via quarterly questionnaires of senior executives in Singapore realty business.
Global political headwinds are casting a shadow over Singapore’s realty industry, according to the most recent Property Sentiment Index (Resi) released by the National University of Singapore (NUS). The Composite Sentiment Index dipped to 4.9 in 1Q2026, from 5.8 in the last quarter.
