Property market turns pessimistic amid Middle East crisis: NUS
Offices fared fairly far better. While the market’s current net balance slid to 0% from the 12% in 4Q2025, low Grade A vacancy and a restricted upcoming supply pipeline are anticipated to bolster this section, reflected in a positive future outlook of +15%.
Global political headwinds are casting a shadow over Singapore’s real estate industry, according to the latest Realty Sentiment Index (Resi) published by the National University of Singapore (NUS). The Composite Sentiment Index plunged to 4.9 in 1Q2026, from 5.8 in the last quarter.
Still, the domestic home industry stays steady, with participants reflecting measured confidence in the suburban non commercial market. Throughout all property segments, suburban residential topped the list with a positive current web balance and future internet equilibrium of +15% each.
However, belief in the prime residential market has actually relaxed. Whilst the sector held a favorable current net balance of 5% in 1Q2026, the number is a noticeable decrease from the 41% logged in the last quarter. “The prime residential field is inherently more sensitive to shifts in global capital and international buyer sentiment,” mentions Qian.
Survey results indicated 50% of developers expect higher costs for new residential release for the next 6 months, while 60% forecast start volumes to hold firm, supported by durable buyer need.
“With the Composite Index sliding below the neutral limit, it is clear that the sector is shifting from an expansionary mindset to among protective consolidation as businesses shift into a ‘risk-off’ stance,” says Qian.
Across business and industrial sectors, sentiments broadly declined. The business park and hi-tech area market led this downturn, uploading an existing web balance of -25% and a future net balance of -20%.
It comprises a Current Sentiment Index and a Future Sentiment Index, that monitor adjustments within the prior 6 months and the following 6 months, respectively. Scores from both of these indices are accumulated to obtain a Compound Index, that indicates general market view.
Both the current and future view indices dropped in 1Q2026. The previous contracted to 4.9 from the previous quarter’s 6.1. The latter slid to 5.0 from 5.5 in the preceding quarter.
Generated by NUS’ Department of Real Estate and Institute of Real Estate and Urban Studies (Ireus), the Resi tracks perceptions and assumptions of the property industry via quarterly surveys of senior execs in Singapore real estate companies.
Professor Qian Wenlan, director of the NUS Ireus, associates the gloomy move in the market to macroeconomic headwinds stemming from the conflict taking place in the Middle East. “The recurring crisis in the Middle East– with its plunging effects on climbing energy costs, consistent inflation, and raised interest rates– has dampened property sentiment right here in Singapore,” she explains.
Sentiment also fell in the retail and hospitality real estate markets. The prime retail and suburban retail sectors logged current net balances of -20% and -15% for 1Q2026, while the hotel and serviced apartment segment had a current net equity of -15%.
