Middle East conflict impact on Singapore real estate

What Happened?

• Prolonged disruptions to Middle Eastern oil supply have pushed up energy costs across Asia, reinforcing inflationary pressures and weighing on regional growth momentum. While a conditional two-week ceasefire between the United States and Iran was reached as of 8 April, uncertainty remains elevated. 
• Oil prices have remained higher than before the conflict started and business confidence has started to erode and consumer sentiment has weakened. Inflationary pressures are rising across the region, and central banks may now delay or reverse expected rate cuts. APAC GDP growth in 2026 is likely to come in below the 4.0% baseline forecast. Further insights on APAC can be found here.

What It Means For Singapore

• For Singapore, while fuel rationing, austerity measures, or work-from-home mandates to reduce petrol consumption have not been implemented, the authorities have cautioned that energy prices may remain structurally elevated over the longer term. This would inevitably weigh on Singapore’s growth and inflation outlook. GDP growth is currently forecast at 2–4% in 2026, though this might be revised lower. Inflation is forecast at 1–2% for 2026, but upside risks are building. 
• Taken together with the potential for continued safe-haven capital inflows, these dynamics create a complex backdrop for Singapore interest rates. While higher inflation would typically argue for upward pressure on rates, weaker growth momentum and increased demand for SGD assets could partially offset this, resulting in a more benign rate environment than inflation alone would suggest. For now, Singapore interest rates remain low. As of 8 April, Singapore’s 3-month SORA stands at 1.07%, compared with 1.12% as of 2 March.