A global trade war can’t possibly be good news for a city-state whose exports and imports add up to more than 300% of its gross domestic product. Yet there are good reasons to believe that real estate in Singapore may offer a sanctuary to investors fleeing extreme anxiety.
On the surface, the island economy’s status as the world’s largest transshipment hub is a risk to its pricey apartments. Singapore’s own exports to the US are subject only to the universal 10% tariff that President Donald Trump announced April 2. But its ports and airport sent out merchandise worth about S$675 billion ($517 billion) last year, of which three-fifths were re-exports.
Additionally, it sold nearly S$175 billion of transport services to overseas customers. For a small, open economy of 6 million people, modest fees and commissions from cargo handling, freight forwarding and logistics add up. The inevitable disruption to US-China commerce from retaliatory taxes and embargoes and a potential dislocation of global shipping from the Trump administration’s plan to impose fees on Chinese vessels docking at US ports are bound to have an impact on local jobs and incomes. Singapore authorities aren’t ruling out a recession this year.
Then why should the property market hold up? One reason is household wealth. Ahead of the May 3 elections, the government has been generous with public-housing subsidies and cash vouchers. Even if the tight labor market weakens, Singaporeans will have enough capital, thanks to 20 straight quarters of increases in Housing and Development Board apartments, to upgrade to private condominiums. Local demand should support prices as employment opportunities shrink for foreign-born tenants and buyers.
Some evidence for that comes from so-called executive condos, which are public-private hybrids. A record 162 new units sold last month for S$2 million or more apiece, according to Christine Sun, chief researcher at OrangeTee Group.
National wealth is another line of defense. During the 2008 Global Financial Crisis, the government dipped into accumulated fiscal savings to prevent capital flight and keep resident unemployment in check. It did the same during the pandemic, drawing down two decades of surpluses. The bar for tapping into them is high, though if the trade war turns really sinister, authorities may once again be compelled to use past reserves to stabilize employment and labor income.
The housing market can be directly supported as well. Singapore still imposes stamp duties as high as 60% on purchases by foreigners. If it cuts them to put a floor under property prices, it will be sucking capital out of Hong Kong, where such additional taxes on transactions — introduced in the global cheap-money era — have already been scrapped. Yet buying sentiment is less than cheerful in the Chinese special administrative region. Even after a near 40% increase in home values since the pandemic, and a 22% drop in Hong Kong in the same period, Singapore has an edge over the rival Asian financial center.
However, second-round effects of Trump’s tariffs could blunt real-estate demand more generally. As global commerce shrinks, so would trade finance. If private-banking customers are put off by volatility and withdraw from financial markets, income from wealth management might also take a beating. As bankers’ salaries and bonuses take a hit, demand could wobble at the top end of the property market.
The other area to watch is technology. The tiny island has drawn US lawmakers’ attention for being Nvidia Corp.’s second-largest market last year. The Santa Clara, California-based firm has denied allegations that some of those chips may have gone to DeepSeek, the Chinese artificial-intelligence sensation that the US views as a security threat. Products sold in Singapore “are shipped to other locations, including the United States and Taiwan, not to China,” Nvidia has said in a statement. Nevertheless, getting caught up in an escalating tech battle — Trump has banned H20 chip sales to the People’s Republic — could affect the city’s positioning as a leading AI hub.
However, there is a cushion for real-estate investors here, too. Even if the tariff tantrums descend into a beggar-thy-neighbor currency conflict, Singapore will refrain from joining the fray. Its time-tested policy has been to use the exchange rate to control inflation, not seek a mercantile advantage in trade. So while landlords may struggle to earn good rents for a while, at least their capital will be safe in a stable currency.
Shifting geopolitical alignments might also throw up opportunities. While hard to predict, real estate might be a good bet on their emergence. After all, Singapore became an international financial center because of the British pound’s 1967 devaluation, which triggered a craze amid the rich Chinese diaspora of Southeast Asia to seek dollar-linked investments in their time zone. If they now seek to move away from the US currency, the world’s third-largest foreign-exchange trading venue will benefit.
The proposed Johor-Singapore Special Economic Zone might also open a new line of real-estate demand. With neighboring Malaysia offering a low-cost hinterland, the island’s large financial industry could help companies looking to diversify supply chains away from the People’s Republic. Chinese President Xi Jinping’s recent tour of Southeast Asia shows that Beijing might support such an initiative.
So while no asset class may be totally safe, Singapore property might be a reasonably good place to hide from the storm.
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