MENU

Construction demand expected to remain strong in 2019

by • March 2, 2019 • Buying a property, Residential Property LoanComments (0)190

The Building and Construction Authority (BCA) announced in January that it projects the total construction demand (i.e. the value of construction contracts to be awarded) in 2019 to range between S$27 billion and S$32 billion, comparable to the S$30.5 billion (preliminary estimate) awarded in 2018.

Projected total construction demand in 2019 could be in the upper limit of S$32 billion

Colliers Research: Industrial property market sector is continuing to find its footing

The projected outlook is due to sustained public sector construction demand, which is expected to reach between S$16.5 billion and S$19.5 billion in 2019, contributing to about 60% of the projected demand for this year. Public construction demand is expected to be boosted by major infrastructure projects and a pipeline of major industrial building projects.

The private sector’s construction demand is expected to remain steady at between S$10.5 billion and S$12.5 billion in 2019, supported by projects including the redevelopment of past en-bloc sales sites concluded prior to the second half of 2018 and new industrial developments.

Last year’s total construction demand was within forecast due to strong demand from institutional building and civil engineering projects, continued positive growth in the manufacturing sector and more private residential redevelopment projects from en-bloc sales in 2017 and the first half of 2018. Total preliminary construction demand last year for the public and private sector was S$18.4 billion and S$12.1 billion respectively.

Forecast for 2020 to 2023

construction demand

Building under construction (BUC) of condominium projects in Singapore

BCA expects a steady improvement in construction demand over the medium term. Demand is projected to reach between S$27 billion and S$34 billion per year for 2020 and 2021 and could increase to between S$28 billion and S$35 billion per year for 2022 and 2023.

The public sector is expected to contribute S$16 billion to S$20 billion per year from 2020 to 2023 with similar proportions of demand coming from building projects and civil engineering works. Besides public residential developments, public sector construction demand over the medium term will continue to be supported by big infrastructure projects such as the Cross Island Line, developments at Jurong Lake District and Changi Airport Terminal 5.

BCA also expects private sector construction demand to gradually increase in the medium term, boosted by further growth in the other economic sectors.

Construction Output

Based on the contracts awarded in the past few years and the construction demand forecast for 2019, total nominal construction output in 2019 is projected to increase to between S$28 billion and S$30 billion, compared to the estimated S$27 billion in 2018. This is supported by the improved construction demand in 2018 following the 2015-2017 slowdown.

Year Construction demand (Value of contracts awarded, S$billion) Construction Output (Value of certified progress payments, S$billion)
Public Private Total Total
2018p 18.4 12.1 30.5 27
2019 f 16.5 – 19.5 10.5 – 12.5 27 – 32 28 – 30
2020 – 2021 f 16 – 20 per year 11 – 14 per year 27 – 34 per year
2022 – 2023 f 12 – 15 per year 28 – 35 per year

p: Preliminary f: forecast

Innovation to accelerate and transform the way BCA builds

BCA said that as it continues to push for the adoption of advanced construction methods in both public and private sector projects to improve productivity and enhance infrastructure sustainability and maintainability, firms are encouraged to invest in technology and innovation which will enable them seize future opportunities.

To help firms do so, BCA will expand the Building Innovation Panel (BIP) – an inter-agency platform that accelerates the regulatory clearance of technologies that improve construction productivity – to cover any type of innovation that can improve Singapore’s built environment. Such innovations can include advanced and sustainable building materials, technologies for green buildings and automation for construction.

The enhanced BIP will be implemented in February 2019 and benefit Singapore’s built environment by supporting the innovation efforts of our firms.

Singapore office market recovery finds firmer footing

Paul Ho, chief mortgage consultant at iCompareLoan, acknowledged that the construction demand improved last year when compared to the sluggish demand in the prior years.

“One reason for the increase in construction demand is because Singapore as a property market investment destination, still remains among the top cities in the world like London, New York, Shanghai and Sydney,” Mr Ho said.

He added: “We have to be mindful that there is a lot of excess capital fluidity here and at 1.9 – 2 percent, Singapore has one of the lowest interest rates for home loans in the region.”

How to Secure the Best Commercial Loans Quickly

iCompareLoan is the best loans portal for commercial loans, buyers, investors and real estate agents alike in Singapore. On iCompareLoan, you will be able to find all the latest news and views, informational guides, bank lending rates and property buying trends, and research data and analysis.

Whether you are looking to buy, sell or refinance apartments, condominiums, executive condos, HDB flats, landed houses or commercial properties, we bring you Singapore’s most comprehensive and up-to-date property news and best home loans trends to facilitate your property buying decisions.

Our Affordability Tools help you make better property buying decisions. iCompareLoan Calculators help you ascertain the fair value of a property and find properties below market value in Singapore.

Our trademarked Home Loan Report is Singapore’s first one-of-a-kind analysis platform that provides latest updates of detailed loan packages and helps property agents, financial advisors and mortgage brokers analyse best home loan packages for their clients, so that they may give unbiased home loan/commercial loan analysis for their property buyers and home owners. Our distinguished Panel of Property Agents who are users of our Home Loan report can give the best all-rounded advise to real estate seekers.

All the services of our mortgage consultants are ABSOLUTELY FREE, which means it’s all worth it to secure a loan through us.

Whether it is best home loans, best commercial loans or refinancing of existing loans or SME loans, CONTACT US TODAY!

Pin It

Related Posts

Simple Share Buttons