Knight Frank Commentary | URA Q2 2026 Real Estate Statistics

Knight Frank Commentary | URA Q2 2026 Real Estate Statistics

Residential

The URA All Residential Price Index increased 0.5% q-o-q in Q2 2026, registering the same increase as the flash estimates announced on 1 July 2026. As there were no new launches in the month of June coupled with muted activity due to the school holidays, the final numbers announced today are fairly similar to the flash estimates released at the beginning of the month. The three new launches in Q2 2026 comprising Hudson Place Residences in Media Circle, Tengah Garden Residences in Tengah and Vela Bay at Bayshore in April and May, were priced at levels that did not escalate beyond levels already established in the Rest of the Central Region (RCR) and the Outside Central Region (OCR), as both indices declined 1.2% q-o-q and 0.1% respectively. As such, prices in the non-landed private home market were stable in Q2 2026 with a slight easing of 0.1% q-o-q overall. Going forward, this more sustainable and balanced phase of price growth that has been observed from 2024 onwards will likely continue.

Prices in the Core Central Region (CCR) increased 1.8% q-o-q, with demand for premium non-landed residences being maintained. Growth in this segment was partly contributed by newly minted citizens and permanent residents, with the government stepping up the granting of citizenships and PR status in recent years to counter stark demographic challenges arising from lower birth rates. Some of these households have also transitioned from renting to owning homes, further supporting demand in the upscale residential market.

The landed housing market rebounded in Q2 2026, with prices rising 2.5% q-o-q to an all-time high, after edging down 0.4% q-o-q in the preceding quarter. Demand is expected to remain relatively robust, especially for properties priced between S$5 million and S$10 million, assuming valuations remain reasonable relative to each home's location and attributes. Overall, landed home prices are forecast to appreciate by around 3% to 5% this year, in line with broader private residential market trends.

The URA rental index for private homes increased by 0.7% q-o-q and 1.0% in the first six months of 2026, pointing to a balance between demand and supply and a stable leasing market. Rents remain on track to grow by 1% to 3% for the whole of 2026, despite softer corporate housing budgets and a preference for lower-cost accommodation restraining rental growth.

Singapore’s non-landed private residential market should remain resilient in the remainder of 2026, supported by what can sometimes seem like indomitable domestic demand at new launches. There is a deep pool of Singaporean purchasers, underpinned by intergenerational wealth that accumulated through property ownership since the country’s independence. Geopolitical uncertainty also contributes to demand as Singapore’s reputation as a safe, stable and efficient financial hub continues to generate enquiries from globally mobile executives and families seeking to relocate capital or establish a capital-preservation base away from conflict-affected zones. Overall, non-landed private residential prices are on track to increase 3% to 5% for the entire year 2026. The healthy demand at new launches remains supported by wealthy local buyers, professionals and business owners who have obtained residency bolstered by Singapore’s safe-haven appeal.

Buyers will continue to gravitate towards well-located projects that offer connectivity and future growth potential in various neighbourhoods, as benign mortgage rates (more favourable than a year ago) support sustained demand from HDB upgraders and genuine owner-occupiers. At the same time, the pricing gap between new launches and resale homes persist, creating a two-tier market where new projects command a premium and homes that have been completed for some time provide more affordable options for both upgraders and downgraders.

Office

The office rental index grew by 0.8% q-o-q in Q2 2026, a reversal from the 0.2% q-o-q decline recorded in the previous quarter. However, islandwide occupancy slipped marginally by 0.2 percentage points (pp) from 89.2% to 89.0% in Q2 2026. Despite the slight dip in occupancy levels, the growing office rental index reflected the continued firm and stable demand by occupiers of office spaces.

Singapore’s office market in Q2 2026 was affected by the combination of external uncertainties, the lack of new office supply due to the absence of land in the CBD for office development from the government, and occupier behaviour that generally favoured stability over expansion, with relocation costs a major barrier to expansion moves. Although global instability compelled office users to tread cautiously, the same uncertainty also bolstered Singapore’s position as a safe-haven business hub, supporting longer-term interest from multinational occupiers seeking a stable regional base away from conflict zones. Investors are cognisant of Singapore’s stability and have been active in acquiring office buildings in the first half of 2026 for the asset type’s steady recurring income. 

In many cases, renewals were executed more out of necessity than expansion, being easier to justify rental increments that are broadly in tandem with Singapore’s inflation levels than to commit to significant rental step-ups that reflect a capital-intensive move into a larger space. The lack of justifiable relocation budgets has resulted in a corresponding lack of urgency among corporates to change premises.

Nevertheless, compelling alternatives can emerge. The flight-to-quality trend continues to shape selective leasing decisions. Companies on a growth path and need to expand have been and remain drawn to well-located, newer Grade A buildings in the CBD. As such less competitive older buildings, particularly those without sheltered connectivity to mass transit nodes in Singapore’s tropical climate or with weaker/obsolete specifications, face increased vacancy risks and mounting downward pressure on rents. And while not yet a trend, the current market in the CBD has also prompted some to consider decentralised locations.

Looking ahead, market conditions should remain resilient but measured. The appeal of Singapore as a safe haven will support its long-term attractiveness, as the world economy changes through the buildup of uncertainty created by political tensions, trade disagreements and especially open conflict. The preexisting market dynamics observed in the first six months of the year is expected to prevail in the remaining half, and likely into 2027. Rents are projected to increase by 3% to 5% in 2026 given the tight CBD supply, with decentralised spaces capturing spillover demand when CBD occupiers require lower cost options to accommodate much needed growth.

Retail

In Q2 2026, rents of retail space increased 0.6% q-o-q, rebounding from the 0.6% q-o-q decline in the first quarter of 2026, even though the islandwide occupancy rate slid marginally by 0.2 pp to record 93.5% in Q2 2026. 

Several F&B and retail outlet closures continued to draw attention during the quarter, including Old School Delights at Esplanade, Encore by Rhubarb, Wing Seong Fatty’s Restaurant, Jumbo Seafood’s flagship East Coast Seafood Centre outlet, Tim Ho Wan at Plaza Singapura, and Don Don Donki alongside other retailers at HarbourFront Centre. Notably, closures at some of these locations were driven by redevelopment plans, underscoring the ongoing impact of constant asset repositioning in Singapore’s retail and dining landscape.

At the same time, new entrants also emerged. Upcoming openings include CHAGEE at Sengkang Grand Mall and Torikizoku at VivoCity, while Yang's Dumplings at Bugis Junction and Rituel Tokyo at Ngee Ann City have recently opened. This steady pipeline of new concepts, particularly from overseas brands, highlights that Singapore remains an attractive location for expansion. This attractiveness also drew returning players, such as Holland & Barrett and Mom’s Touch re-entering the market after previously exiting.

The ongoing discourse surrounding the transformation of Orchard Road to boost footfall and generate vibrant human activity may be overstated after several attempts, and risks becoming a cyclical narrative. While select older malls may warrant targeted rejuvenation, broad overhauls are unlikely to be necessary, given the continued stability in tourist arrivals and the sustained growth in per capita tourist spending. Singapore’s urban structure is inherently decentralised and highly efficient, with consumers commuting seamlessly between residential and commercial nodes rather than congregating in a single district for extended periods. Furthermore, Orchard Road’s elevated cost base can naturally limit the presence of everyday amenities, which are essential to sustaining regular, neighbourhood-level activity. Although the emergence of new private residential developments within the Orchard precinct could enhance off-peak footfall and contribute greater organic vibrancy, adding more residents should not be taken as a silver bullet that transforms Orchard Road into a 24/7 precinct.

In the second half of the year, tourist arrivals are expected to remain stable with higher per capita spending. The latest tranche of government household vouchers for essential goods could ease cost pressures, potentially lifting discretionary spending. These factors are likely to underpin retail activity. Rents are projected to remain stable and register growth of approximately 2% to 4% for the full year 2026, in spite of the ongoing challenges in the sector.