Commentary on URA Q2 2025 statistics - Office, Retail, and Residential

By Tricia Song (宋明蔚), Head of Research, Southeast Asia, CBRE

Office

Singapore’s office market saw a modest rebound in Q1 2025. However, the momentum softened in Q2 2025, with the URA Office Rental Index for the Central Region registering a marginal 0.3% q-o-q decline, reversing the 0.3% increase recorded in the previous quarter.

According to URA, Category 1 median rental rates (based on contract date) declined 3.2% q-o-q to $11.68 psf/month, down from $12.07 psf/month in Q1 2025. This came despite a slight improvement in vacancy rates, which fell from 11.7% to 11.0%, likely due to the absorption of space at IOI Central Boulevard Towers, which achieved approximately 85% occupancy by the end of Q2 2025, according to CBRE Research.

Conversely, Category 2 offices saw its third consecutive quarterly increase in rentals, with median rents based on signed contracts rising by 2.7% q-o-q in Q2 2025, following a 1.0% q-o-q increase in Q1 2025.

The opposite directions of rental movements in Category 1 and 2 offices may reflect broader market caution amid ongoing global economic and geopolitical uncertainties, with cost-efficient buildings gaining ground.

Separately, CBRE Research shows a different trend, with continued rent growth in the Core CBD Grade A segment. Rents in this category rose 0.4% q-o-q to $12.10 psf/month, supported by a sustained flight to quality as occupiers prioritised premium office spaces during relocations.

Table 1: Median rentals based on contract date 

	Category 11			Category 22
	Rents ($ psf/month)	Q-o-q	Vacancy	Rents ($ psf/month)	Q-o-q	Vacancy
Q2 2024	$11.83	4.0%	10.1%	$6.44	5.9%	11.1%
Q3 2024	$11.73	-0.8%	10.3%	$6.21	-3.6%	11.3%
Q4 2024	$12.08	3.0%	9.1%	$6.29	1.3%	11.3%
Q1 2025	$12.07	-0.1%	11.7%	$6.35	1.0%	11.7%
Q2 2025	$11.68	-3.2%	11.0%	$6.52	2.7%	11.6%

¹ Refers to office space in buildings located in core business areas in Downtown Core and Orchard Planning Area which are relatively modern or recently refurbished, command relatively high rentals and have large floor plate size and gross floor area.
² Refers to the remaining office space in Singapore which are not included in “Category 1”.
Source: URA

According to the latest data from URA, no new office supply was introduced in Q2 2025. Islandwide vacancy rate rose in Q1 2025 to 11.7% due to the injection of new completions - Keppel South Central and Paya Lebar Green, but this vacancy rate improved marginally to 11.4% by Q2 2025. CBRE Research understands that these developments are experiencing active leasing, and we could see progressive take-up in the coming quarters.

URA’s price index showed that prices for office spaces in the central region declined 1.1% q-o-q in Q2 2025, faster than the 0.2% decline in Q1 2025. This also represented a cumulative decline of 1.9% since Q3 2024.

Outlook

According to CBRE Research, Core CBD (Grade A) office rents rose 1.3% in H1 2025, defying earlier concerns over global headwinds. Despite these uncertainties, Singapore’s reputation as a stable and attractive business hub continues to attract occupiers, potentially positioning the market to benefit from regional uncertainty.

With limited new supply in the pipeline, market dynamics are expected to remain strong, supporting continued growth through 2025 and beyond. CBRE Research has revised its rental forecast upward, projecting full-year growth at the upper end of the 2–3% range.

With a sustained rental growth, limited new supply pipeline and significant declines in the interest rate in Singapore, investor sentiment towards office assets could improve going forward, supporting office prices.

Retail

Retail indicators such as the retail sales index was relatively stable in Q2 2025. Apr 2025 saw a slight rise of 0.4% y-o-y, the first month of growth in the last 12 months with the exception of Jan 2025 which saw a 3.7% y-o-y increase due to the difference in the timing of Chinese New Year in 2024 and 2025. However, May 2025 saw a marginal dip of 0.1% y-o-y. Meanwhile, visitor arrivals continued to recover, increasing by 4.0% y-o-y in the quarter.  

URA’s Q2 2025 data showed that rents of retail space in the Central Region increased by 0.9% q-o-q, reversing the decline of 0.5% the previous quarter. Similarly, CBRE Research’s data showed that islandwide prime floor rents increased by 0.7% q-o-q in Q2 2025, bringing H1 2025 rent growth to 1.3%.

That said, according to URA data, Q2 2025 saw negative net absorption of 18,000 sq. m. (about 194,000 sq. ft.) in the islandwide private retail market, extending the negative net absorption of 12,000 sq. m. (about 129,000 sq. ft.) in the previous quarter. As a result, islandwide private retail vacancy rates rose from 6.6% in Q1 2025 to 7.0% in Q2 2025.

• Retail space demand in Singapore continued to soften in Q2 2025, with media reports highlighting high rents and rising costs leading to store closures, including Fluff Stack, Kanada-Ya, Challenger, and Crystal Jade La Mian Xiao Long Bao. CBRE Research views these as natural market recalibration driven by evolving consumer behaviors and heightened competitive pressures.
• Despite some consolidations, CBRE Research observed selective expansions across diverse sectors, with F&B operators such as Pizza Studio Tamaki, Huggs, and Xiao Yu Hao continuing to lead demand. Fashion brands like 2nd Street, Motherhouse, and Lovet expanded their footprint, while service providers including Emirates World, Nowhere Baths, and Dr Bags also grew their presence.

All submarkets experienced negative net absorption in Q1 2025, with the exception of the outside central region (OCR) submarket which rebounded with positive net absorption of 2,000 sq. m. (about 22,000 sq. ft.) after posting the highest negative net absorption among all submarkets in Q1. However, with a net increase in supply of 3,000 sq. m. (about 32,000 sq. ft.), the area still saw a slight rise in vacancy rates from 4.4% in Q1 2025 to 4.5% in Q2 2025. 

Conversely, the Rest of Central submarket saw the highest negative net absorption in Q2. The area registered negative net absorption of 7,000 sq. m. (about 75,000 sq. ft.), after outperforming the rest of the submarkets with positive net absorption of 8,000 sq. m. (about 86,000 sq. ft.) in Q1 2025. This could be attributed to numerous closures in the submarket in Q2 2025 such as 1880, 1939 Singapore, and Wild Blaze.

Alongside the increase in rents, URA’s price index showed that prices for retail spaces in the central region rose marginally by 0.1% q-o-q in Q2 2025, extending the rise of 1.9% in the previous quarter. Despite the U.S. Fed pausing rate cuts, Singapore’s financing costs have continued to ease amid ample liquidity. Combined with expectations of a tourism recovery and steady consumer spending, investor appetite for both prime and suburban retail assets remained resilient.

Outlook

Retailers continue to face headwinds from rising operating costs and intensifying e-commerce competition. Amid escalating geopolitical tensions and economic uncertainty, expansion strategies are expected to remain cautious. However, a rebound in tourism, bolstered by a strong calendar of MICE events and concerts, is set to support demand for prime retail space. With new supply projected to stay below historical norms, CBRE Research anticipates that overall prime retail rents will return to pre-COVID-19 levels by end of 2025.

Residential

In Q2 2025, private housing prices rose 1.0% q-o-q. This was higher than the initial flash estimate of 0.5% q-o-q and marginally above the 0.8% q-o-q increase in Q1 2025. 

The price increase was led by landed properties which posted 2.2% q-o-q growth, accelerating from 0.4% q-o-q in Q1 2025. Meanwhile, non-landed properties saw prices rise 0.7% q-o-q, slowing from 1.0% growth last quarter.

The price performance across non-landed segments was uneven across the 3 non-landed segments in the quarter, with the CCR recording the largest increase of 3.0% q-o-q, a pickup from its 0.8% q-o-q rise in Q1 2025. OCR prices grew 1.1% after a mild 0.3% increase in Q1 2025. The RCR reversed its top performance in Q1 of 1.7% growth, declining 1.1% q-o-q in Q2. This brings 1H25 price growth for CCR, RCR and OCR to 3.8%, 0.4% and 1.4%, with CCR leading growth in 2025. However, CCR is still playing catch up as prices are up 24% from its Covid trough, while RCR and OCR are up 50% and 47% respectively since their Covid troughs.    

The rental index of private residential properties was up 0.8% q-o-q in Q2 2025 after the 0.4% increase Q1 2025. With a cumulative 1.2% increase in H1 2025, rents are recovering after the 1.9% correction in 2024. However, we note there was an increase in vacancy rates among all non-landed market segments, despite very few completions – 341 units (ex-ECs) completed in Q2 (1,988 units in Q1) – and yet the stock of occupied private residential units (ex-ECs) decreased by 2,585 units, compared to a positive increase of 2,498 units in Q1. Barring a significant economic downturn, this could be a short-term frictional movement. With 2,620 units expected in H2 2025 and 4,949 units for the whole of 2025, this is 41.5% lower than 2024’s completions of 8,460 units. We maintain our forecast for islandwide rents to rise 1 – 3% in 2025.

1,212 new private homes (excluding ECs) were sold in Q2 2025, down 64.1% q-o-q from Q1 2025’s bumper 3,375 units on fewer launches. This brings H1 2025 new home sales to 4,587 units, up 142.8% y-o-y from the 1,889 units recorded in H1 2024. With more launches in H2 2025, sales could improve, especially if developers price and design them competitively and sensitively.  CBRE Research maintains our full year new home sales to be 7,000 – 8,000 units.

Correspondingly, private home prices which have risen 1.8% in H1 2025 could see similar growth momentum in H2 2025. We maintain a full-year 2025 private home price increase of 3 – 4% for now, on still-low unsold inventory and strong household balance sheets. 

Details

Private housing prices rose 1.0% q-o-q. This was higher than the initial flash estimate of 0.5% q-o-q and marginally above the 0.8% q-o-q increase in Q1 2025. The price increase was led by landed properties which posted 2.2% q-o-q growth, accelerating from 0.4% q-o-q in Q1 2025. Meanwhile, non-landed properties saw prices rise 0.7% q-o-q, slowing from the 1.0% growth last quarter.

The price performance was mixed across the 3 non-landed segments was mixed in the quarter. The OCR, which did not observe any new launches in the quarter, saw price growth pick up in Q2 2025, rising 1.1% q-o-q after the 0.3% increase in Q1 2025. The CCR and RCR which saw new launches in the quarter saw a divergence in performances. The CCR outperformed, posting moderate price growth of 3.0% q-o-q in Q2 2025, an acceleration from 0.8% growth in the previous quarter. In contrast, the RCR which outperformed in Q1 2025 underperformed in Q2 2025. Prices saw a 1.1% q-o-q decline after the 1.7% rise in Q1 2025.  

• RCR’s underperformance could have been attributed to realistic pricing at new launches One Marina Gardens (937 units) and Bloomsbury Residences (358 units). The former, which was the top-selling launch in Q2 2025 moved 353 units (38% of total units) at an average price of $2,953 psf over its launch weekend in April 2025. Meanwhile, Bloomsbury Residences (358 units) located in the one-north precinct was sold 151 units (42% of total units) at a median price of $2,470 psf in Q2 2025, 3% lower than the median price of $2,546 psf at prior launch The Hill @One-North (142 units). 
• Amid low transaction volumes, CCR non-landed price index may have been boosted by new ultra-luxury launch 21 Anderson (19 units) which sold 5 units at a median price of $4,811 psf in Q2 2025. A 5-bedroom unit on the 55th floor of existing launch Skywaters Residences (190 units) also changed hands for $30.87 mil ($5,841 psf). 

Table 2: Top 10 best-selling new developer sales projects (excluding ECs) in Q2 2025 (ranked in descending order by number of units sold in the year)

Project name	Tenure	Market segment	Units sold	Median Price ($psf)	% Of project sold as of Q2 2025*
ONE MARINA GARDENS	99 yrs	RCR	479	$2,950	51.1%
BLOOMSBURY RESIDENCES	99 yrs	RCR	158	$2,473	44.1%
THE HILL @ONE-NORTH	99 yrs	RCR	47	$2,490	76.8%
GRAND DUNMAN	99 yrs	RCR	41	$2,542	78.9%
PARKTOWN RESIDENCE	99 yrs	OCR	34	$2,377	90.4%
HILLOCK GREEN	99 yrs	OCR	32	$2,272	92.4%
NAVA GROVE	99 yrs	RCR	26	$2,565	81.3%
THE CONTINUUM	Freehold	RCR	23	$2,855	73.0%
THE LAKEGARDEN RESIDENCES	99 yrs	OCR	21	$2,130	75.5%
PINETREE HILL	99 yrs	RCR	21	$2,648	85.4%

Source: URA, CBRE Research 
*Sales status based on caveats from Realis as of 25 Jul 2025.

New home sales plunged in Q2 2025 amid a sharp drop in new units launched and growing market caution. 1,212 units were sold—down 64.1% q-o-q from Q1’s high of 3,375 units, though up 67.2% y-o-y from 725 units in Q2 2024. The slowdown reflects cautious buyer sentiment, weighed down by persistent trade frictions and geopolitical tensions that have clouded Singapore’s economic outlook. Developers launched 1,520 new units in Q2 2025, about half the 3,139 units in Q1 2025. The top performing new launches were One Marina Gardens (937 units) and Bloomsbury Residences (358 units), although both saw relatively muted launch weekend take-up rates of just 38% and 25% respectively.

Resale transaction volumes in Q2 2025 rose slightly by 2.3% q-o-q to 3,647 units, after 3,565 units in Q1 2025. Resale transactions made up 71.1% of total transactions in Q2 2025, up from 49.1% in Q1 2025. 

Alongside slower new sales, unsold inventory of uncompleted private residential units (excluding ECs) rose 2.1% q-o-q in Q2 2025 to 18,498 units from 18,125 units in Q1 2025. Including completed units, unsold inventory likewise increased 2.1% from 18,270 units in Q1 2025 to 18,653 units in Q2 2025. 

• Unsold inventory is significantly lower than the last peak of 37,799 units recorded in Q1 2019. At 18,653 units, this implies more than two years’ of landbank based on the 5-year annual average new home sales (2020 – 2024) of 8,600 units and 2024’s total developer sales of 6,469 units. 

Rentals of private residential properties saw faster growth in Q2 2025 after Q1 2025’s rise. URA’s islandwide rental index was up 0.8% q-o-q in Q2 2025 after rising 0.4% q-o-q in Q1 2025.

• Non-landed properties led in Q2 2025, posting a 0.8% q-o-q increase while landed property rents rose at a slightly slower 0.7% q-o-q.
• Among non-landed properties, performance was mixed across market segments. The CCR outperformed, rising 1.8% q-o-q picking up from the 0.4% q-o-q increase in Q1 2025. Comparatively, RCR and OCR rents were largely flat in Q2 2025, the RCR remained unchanged while the OCR recorded 0.1% q-o-q growth, compared to respective 0.4% and 0.7% q-o-q increases in Q1 2025.
• In Q2 2025, 341 private residential units were completed, 82.8% lower than Q1 2025’s 1,988 units. Looking ahead, 2,620 private residential units (excl. ECs) are expected to be completed in H2 2025. At a total 4,949 units for the whole of 2025, this is still 41.5% lower than 2024’s completions of 8,460 units.
• The stock of occupied private residential units (excluding ECs) decreased by 2,585 units in the quarter, compared with an increase of 2,498 units in the previous quarter. As a result, the vacancy rate of completed private residential units (excluding ECs) rose to 7.1% in Q2 2025, from 6.5% in the previous quarter.
• Vacancy rates of completed private residential properties as at Q2 2025 in CCR, RCR and OCR were 10.7%, 7.2% and 5.6% respectively, compared with 10.3%, 6.6% and 4.7% in the previous quarter.

Outlook

• The tally of new homes sold in H1 2025 is currently at 4,587 units, up 142.8% y-o-y from the 1,889 units recorded in H1 2024 largely on the back of strong Q1 2025 homes sales (3,375 units). The lack of launches and weak sales in May and June reflect the cautious sentiment among developers and homebuyers on the back of ongoing global trade frictions which have dampened Singapore’s economic outlook. 

On 3 Jul 2025, the government announced a new round of cooling measures. Seller’s Stamp Duty was raised by 4 ppts and the holding period to 4 years with effect from 4 Jul 2025. This is expected to have a limited impact on transaction volumes and pricing as it should not impact the majority of buyers who are genuine owner occupiers or long-term investors.

CBRE Research maintains our full year new home sales to be 7,000 – 8,000 units, signalling a slowdown in new home sales compared to H1 2025, but we note sales performance could surprise on the upside if developers price and design their projects sensitively.

• Rents appear to have stabilised with the URA rental index rising for a second consecutive quarter and seeing faster growth of 0.8% q-o-q in Q2 2025 after the 0.4% rise in Q1 2025. With a cumulative 1.2% increase in H1 2025, rents are recovering after the 1.9% correction in 2024. We note, however, that the recovery in Q2 2025 is rather mixed, largely supported by the landed segment and higher non-landed CCR rents in in the quarter while OCR and RCR rents were rather flat. There was also an increase in vacancy rates among all non-landed market segments. Vacancy rates of completed private residential properties as at the end of 2nd Quarter 2025 in CCR, RCR and OCR were 10.7%, 7.2% and 5.6% respectively, compared with the 10.3%, 6.6% and 4.7% in the previous quarter. With slightly higher completions expected in H2 2025, the rate of rental growth could moderate. Overall, we forecast islandwide rents to rise 1 – 3% in 2025, barring a significant pullback in demand.
• Private home prices which have risen 1.8% in H1 2025 could see similar growth momentum in H2 2025. We maintain a full-year 2025 private home price increase of 3 – 4% for now, on still-low unsold inventory and strong household balance sheets.

 

Read the URA press release here.