Pricing Structures and Market Segmentation in Residential and Commercial Properties

Pricing structures and market segmentation in residential and commercial properties reflect distinct dynamics driven by demand, supply, and user profiles.

Residential Properties:

• The residential segment dominates the market share, accounting for over 50% of real estate revenue, with a strong base of owner-occupiers supported by government Build-to-Order flats and subsidies linked to location value. This creates a segmentation into Standard, Plus, and Prime flats, encouraging balanced demand across different townships.

• Private residential projects increasingly adopt integrated formats combining residences with retail and community amenities, enhancing value and absorption rates.

• Market segmentation within residential properties is evident in the division between the Core Central Region (CCR) and Outside Central Region (OCR). The OCR, with more affordable pricing and strong local demand, has seen higher sales velocity and developer focus, while the CCR caters to luxury buyers with slower sales and more foreign investor influence.

• Price growth varies by segment: HDB resale flats have shown strong price increases (around 9.3% in 2024), suburban condos in the OCR have moderate growth (~3.9%), and luxury CCR condos have more modest gains (~4%).

Commercial Properties:

• Commercial real estate is growing faster than residential, with a projected compound annual growth rate (CAGR) of about 5.13% through 2030, driven by economic digitalization and demand for logistics, industrial, data centers, and decentralized office spaces with green credentials.

• Market segmentation in commercial properties is shifting away from traditional retail and single-tenant offices toward logistics, industrial assets, and data centers, reflecting changes in user demand and investment preferences.

• Pricing in commercial real estate is influenced by factors such as tenant demand, location, and asset type, with downward or upward pressure depending on secular trends like e-commerce growth or work-from-home practices affecting office space needs.

Summary Table:

This segmentation and pricing structure reflect a market adapting to demographic shifts, government policy, and evolving economic drivers, with residential properties anchored by owner-occupier demand and commercial properties driven by digital economy and logistics growth.