Oversupply from China to cut Singapore construction material prices further in Q2
[SINGAPORE] Prices for some construction commodities in Singapore are tipped to fall further in the second quarter, with steel rebar prices forecast to fall 13 per cent year on year driven by oversupply and competitive exports from China.
This could benefit developers, builders and other construction contractors, though new tariffs may disrupt global supply chains in the near term, a report by construction consultancy Linesight said.
Linesight predicted that prices for several key materials – such as copper, steel rebar, stainless steel, steel flat, cement and diesel – will dip in the second quarter of this year.
Lower prices of between 1 and 13 per cent year on year follow corrections across most of the Asia-Pacific (Apac) in 2024.
Steel rebar prices in Singapore, for instance, have been on a decline since Q2 2023. It is forecast to fall another 20.6 per cent in Q2, extending an estimated 19.7 per cent decline in the first quarter. Year on year, steel rebar prices are expected to be 13 per cent lower.
The drop in steel rebar prices, in particular, is set to continue in most of Apac and Gulf Cooperation Council markets amid global trade tensions and uncertain local production, said Linesight.
A NEWSLETTER FOR YOU
Tuesday, 12 pm Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
Sign Up
Sign Up
Oversupply and competitive export prices, especially from China, puts pressure on regional steel rebar prices, it added. 'The imposition of US tariffs has inadvertently increased domestic steel availability, further contributing to price declines in some regions.'
Prices of concrete, lumbar and plasterboard are estimated to hold steady in Q2, while that of bricks could inch up 1 per cent and aluminium up 6 per cent.
Aluminium prices had fallen in the previous year – bucking gains in most of Apac – due to already high base prices, Linesight noted. But tight supply conditions, rising production costs and geopolitical factors turned the tide in 2025 with prices up seen creeping back up, it said.
For the rest of this year, Linesight projects a -1 to +1 per cent price change for most of Singapore's construction commodities.
'Global geopolitical tensions continue to contribute to the overall inflationary risk premium in the construction industry,' said Linesight.
'Trade restrictions, tariff uncertainties, and raw material bottlenecks are creating unpredictable cost scenarios for developers and contractors. These factors, coupled with energy market volatility, are amplifying volatility in cost planning and procurement.'
Easing wages
The consultancy pointed out that labour inflation eased in Singapore as well, to 1.5 per cent in 2024, from 9 per cent in 2023.
Still, shortages in structural skilled labour persist, putting pressure on the cost of construction, it said.
Linesight added that mission-critical sectors are now facing inflationary pressures, with tight contractor availability and longer lead times for equipment. These include sectors such as data centres, renewable energy facilities and artificial intelligence-driven infrastructure projects.
Overall, construction output is likely to grow steadily across Apac, with strong activity in data centres, infrastructure, industrial and energy sectors, Linesight's report showed.
This is mainly driven by government spending, coupled with large scale projections and industrial expansion, it said. The region is poised to see the fastest growth of data centre colocation over the next five years, commanding a massive construction pipeline of US$56.4 billion.
Singapore's construction industry is forecast to see average annual growth of 4.1 per cent from 2025 to 2028, up from 3.3 per cent in 2024, fuelled by investments in oil and gas, transport, and renewable energy projects.
Construction contracts surged 34 per cent year on year in the first nine months of that year.
The industry's projected improvement is further boosted by the government's push to achieve 2 gigawatt-peak of solar power by 2030 and carbon neutrality by 2050, said the consultancy.
Billions of dollars have also been set aside for its Land Transport Master Plan 2040, which charts Singapore's land transport strategies, and the undersea energy cable project, it said.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
8 hours ago
- Business Times
Newton, Tanjong Rhu, Dover and Bedok plots among 11 new housing sites unveiled for sale; two EC parcels also on offer
[SINGAPORE] Eleven new sites for private residential projects have been made available under the government land sales (GLS) programme, including prime plots in Newton, Bukit Timah and Tanjong Rhu. Ten of the sites announced on Friday (Jun 13) are on the Confirmed List for the GLS programme for the second half of 2025. The last site, a 0.23-hectare (ha) plot in Cross Street in the Central Business District (CBD) for long-stay serviced apartment use, is on the Reserve List. Market watchers expect to see strong demand for the Newton and Tanjong Rhu sites – the first state land plots in these planning areas that have been unveiled for sale in almost three decades. The 0.59-ha site in Newton along Bukit Timah Road is expected to be hotly contested, and can be built into 340 units. The site is anticipated to launch in August. In 2007, it was set aside for transitional office use for a 15-year period to address the shortage of office space, said PropNex's head of research and content, Wong Siew Ying. Knight Frank Singapore's head of research, Leonard Tay, said that the last residential GLS site in the Newton Planning Area was awarded in July 1997. It has been developed into Draycott 8. The plot should draw strong interest from both developers and homebuyers due to its proximity to Newton MRT station, he added. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up The Tanjong Rhu site, which can house around 525 units, is expected to be available for tender in November. It is next to the Singapore Swimming Club and a 10-minute walk away from Katong Park MRT station. Marcus Chu, ERA Singapore's chief executive officer, said: 'This is the first residential GLS plot to be released along Tanjong Rhu Road in nearly three decades, making it a rare opportunity for developers seeking to cater to sustained upgrader demand in the city fringe.' The last GLS residential site released in Tanjong Rhu was awarded in 1997, said Wong. The 99-year leasehold site was developed by Far East Organization into Water Place. Developers will also be able to bid for a Dunearn Road site, the second private residential site to be offered in the new Turf City housing estate, said Lee Sze Teck, Huttons Asia's senior director of data analytics. The site's launch date is expected to be in December. The 1.91-ha site can accommodate 335 private residential units and 1,400 square metres of gross floor area of retail space. It is within walking distance of Sixth Avenue MRT station and is near several popular schools, including Nanyang Girls' High School and Hwa Chong Institution, said PropNex's Wong. A 1.35-ha site along Dover Road set to launch in November is expected to yield 625 units – the biggest project on the H2 GLS 2025 list. 'Located near Singapore's (research and development) hub, one-north, and the Singapore Science Park, the Dover site addresses the housing shortage relative to the area's employment. Given the 50,000-strong workforce in one-north, this parcel… will bring residents closer to key employment hubs,' said Lee. Meanwhile, competition for a 380-unit Bedok Rise site – expected to be up for tender in September – could be strong, given the limited supply of unsold stock in this locale amid healthy demand for mass-market homes, said Wong. This is the last development site around Tanah Merah MRT station following the sale of Sceneca Residence in November 2020, she added. Based on caveats lodged, as at May 31, Sceneca Residence has sold 264 of its 268 units since the project hit the market in January 2023. Robust demand for ECs Two executive condominium (EC) sites are also being offered among the 11 residential sites announced on Friday, in a nod to robust demand for EC projects in recent years. The first, in Woodlands Drive 17, can be developed into 560 units. The other EC site, in Miltonia Close, can yield around 430 units. Together with the three EC sites released in the H1 GLS exercise, the supply of EC units on the Confirmed List now stands at 1,970 units, the highest number annually since 2014, said Wong. 'Increasing EC supply not only provides more housing options, but also mitigates the 'fear of missing out' effect that often drives prices higher during periods of limited availability,' SRI's head of research and data analytics, Mohan Sandrasegeran, said. EC land prices have risen steadily, with the most recent EC land tender awarded in November 2024 to Sim Lian. At S$768 per square foot (psf) per plot ratio for a Tampines site, it set a record. In the first quarter, there were about 735 new EC units sold at or above S$1,600 psf, based on URA Realis data, he said. 'Notably, this included at least 149 units sold at S$1,800 psf or more – crossing a pricing threshold that had previously not been breached in the EC market.' The last three plots on offer are a 1.4-ha site in Dairy Farm Walk which will allow for about 500 units, a 1.12-ha parcel in Kallang Avenue which can house 450 units, and a 1.65-ha plot in Lentor Central which can be built into 580 homes. Tricia Song, CBRE's head of research for Singapore and South-east Asia, said: 'There has been a scarcity of private home supply in the location – the most recent sizeable project was 212-unit freehold Kallang Riverside at Kampong Bugis, which was launched in 2014.' The Lentor Central site will be the eighth to be made available in the area, Huttons' Lee noted. It is next to GuocoLand's fully sold Lentor Modern and the recently launched Lentor Central Residences, which sold 93.3 per cent of its 477 units at an average price of S$2,200 psf over its launch weekend in March. 'The area is popular among buyers for its attractive entry price. Around 100 units from launched projects remain unsold,' he added. Cautious outlook Apart from the Confirmed List sites, there are six residential sites on the Reserve List. The Cross Street plot announced on Friday is next to Telok Ayer MRT station and can yield 300 long-stay serviced apartments. It may be attractive to investors keen on renting out units to foreign professionals working in the area, said Knight Frank's Tay. 'However, it remains to be seen whether demand for CBD residences will lead any developers to trigger this site in the Reserve List,' he added. PropNex's Wong said: 'This plot is not likely to be triggered soon, in view of long-stay serviced apartments being still an untested product, and the potential supply of residential units that may come on the leasing market, owing to several new launches in the city.' Among the remaining five residential sites on the Reserve List is Media Circle (Parcel B), which closed with no bids in April 2025. The rest are sites in Marina Gardens Lane, Holland Plain, River Valley Green and another Media Circle plot. CBRE's Song said: 'We believe placing more supply in the Reserve List is an appropriate response, taking into consideration the slower home sales since April, still-rising prices (and an uncertain) macroeconomic climate. Developers in the recent land tenders have also been measured in their bids, signalling their cautious outlook.'
Business Times
13 hours ago
- Business Times
Homeowners battle insurers over US$2.9 trillion climate risk
[PARIS] When Bernard Weisse first noticed a tiny crack in the outer wall of his house on the outskirts of Paris, he dismissed it as little more than a nuisance. But in the four years since, a spiderweb of fissures has spread from floor to ceiling and snaked into virtually every corner of his home. 'We can hear loud cracking noises especially when it's warm outside,' said the retired salesman and father of three. 'Sometimes, I think we should get all our stuff together and leave.' Like a growing number of people around the world, Weisse is grappling with subsidence – a term for the sinking land that's causing damage to homes and other structures built on it. The slow-moving climate disaster has already caused tens of billions in damage and has the potential to affect 1.2 billion people in areas accounting for more than US$8 trillion of economic output. While groundwater extraction, mining and earthquakes also cause the ground to shift, global warming vastly increases the risks. What happens is that soil swells with winter rain and then shrinks as it dries in the heat, cracking foundations in the process. Because of its soil and its status as the world's fastest-warming continent, Europe is particularly exposed. The European Central Bank estimates the region's potential damage from sinking land at more than 2.5 trillion euros (S$3.69 trillion) across all euro-area financial institutions. Although most of that is classified as 'low risk,' this summer is forecast to be one of the hottest and driest on the continent, creating perfect conditions for subsidence damage. For Weisse, the cost for repairs could climb to as much as 200,000 euros to keep his two-story home from crumbling. That would be part of the estimated 43 billion euros in damage that households face by 2050 in France alone, according to insurance trade group France Assureurs. With that much money at stake, it's set off a battle over who will ultimately have to pay. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Weisse's town of Presles-en-Brie has teamed up with 14 nearby villages and sued the state to have their subsidence issues recognised as a natural catastrophe like flash floods and wildfires. That would trigger payments from insurers and the government, powerful opponents for the municipalities. 'It's David against Goliath,' said Dominique Rodriguez, who's been mayor of the pastoral community of 2,300 people for more than three decades. So far, the big guys are winning. In Presles-en-Brie, at least 40 homeowners have sought subsidence compensation since 2020, and while two houses were granted recognition under a public-private insurance programme called CatNat, others were rejected. Europe is the epicentre because of its clay-rich soil and relatively high population density. Also, buildings from the 1970s and 80s – when a postwar housing construction boom was still underway – are particularly susceptible. While Presles-en-Brie is an early victim, the issues are global. Jakarta has sunk more than 2.5 metres in a decade, and Teheran drops as much as 22 centimetres a year. In the US, Houston is most affected, with 40 per cent of the city subsiding more than half a centimetre a year. More than 425,000 Dutch houses will be exposed over the next decade, with subsidence already lowering house prices by as much as 5 per cent, according to a recent study by the Tinbergen Institute. Repair costs can exceed 100,000 euros per home and are rarely covered by insurance. 'The situation is urgent,' said Karsten Klein, director of advocacy at Vereniging Eigen Huis, a Dutch homeowners association. 'Waiting until homes become uninhabitable is not an option.' In London, shifting ground levels over the next five years are set to affect two-fifths of the housing stock, or more than a million homes, according to the British Geological Survey. Across the UK, there have been a half dozen 'surge years' for subsidence over the last two decades. With the country experiencing one of its driest springs in a century, 2025 could end up as another 'high risk' year, according to Geobear, a company that undertakes repairs. Insurance claims for the hazard jumped 78 per cent between 2019 and 2023 and the average payout rose 40 per cent over that period, according to data provided by the Association of British Insurers. While the UK is one of the few countries in the world where insurers cover subsidence damage, it's tricky to manage because the impacts can be affected by local conditions like trees soaking up water. A few years ago, central London suffered the most from subsidence, but now it affects eastern neighbourhoods more, according to satellite data from Geobear says its data supports the shift of the subsidence burden to eastern London, where the surface is less built up and so more exposed. If movements are related to clay shrinkage, then it makes sense that places like Barking are hit harder, said Otso Lahtinen, Geobear's chief executive officer. In France, half of all single-family homes could be affected by subsidence by the end of the decade, according to Paul Esmein, head of the French insurance lobby. Since 2016, the country's insurers have paid about 1 billion euros a year for subsidence claims. That amount tripled in 2022, when European temperatures hit their second-highest level. To cope with rising losses from natural disasters and provide protection for homeowners, France launched a public-private insurance programme in 1989 called CatNat – a system that puts the state and the industry on the same side as costs surge. Homeowners are compensated for damage after their municipality has been awarded a CatNat certification. Otherwise, insurers are free to reject claims. Despite the challenges faced by communities like Presles-en-Brie, France's system is close to a best-case scenario for homeowners, which have little to no recourse to have subsidence damage covered in most other countries. 'Since its creation, the French system for recognising natural disasters has constantly adapted to the damage suffered by the population,' the French interior ministry said in response to Bloomberg questions, adding that the criteria for subsidence recognition was relaxed last year. In the case of Presles-en-Brie, the interior ministry said natural disaster conditions was recognised for part of 2020 as soil moisture was determined to be abnormal. It didn't comment on the ongoing dispute. Allianz France says that over the last decade subsidence constituted 60 per cent of all CatNat damages in the country, almost double the rate of the previous 15 years. 'The trend is getting more complicated with climate change,' said Pierre Vaysse, chief underwriting officer for property and casualty at the French insurer. 'The forecast is that claims will at least increase by 50 per cent and probably double by 2050.' France's CatNat system lost 49 million euros in 2024, its eighth straight annual deficit. Known as the Central Reinsurance Fund, the programme is paid for by a national surcharge on insurance policies, which was raised by eight percentage points in January to account for climate change. For homeowners, the strained system means higher premiums but with no certainty of coverage, and there's a risk that insurers abandon vulnerable areas as has happened in parts of the US prone to hurricanes and wildfires. Potential repairs include foundation reinforcements known as micropiles and injecting compounds into the soil to stabilise the clay. In some cases, the costs can approach the value of the home. With selling hardly a viable option, owners have little choice but to fork out the money themselves. 'There is a real threat that the damage will end up dislocating our entire house,' said Weisse, the owner of the damaged house in Presles-en-Brie. Burdened by the impact of climate change, the insurance system is 'on its last legs,' said Regis Thauvin, who handles subsidence issues for the town council and is also affected. 'We can't just tell people to wait a year and a half for a decision to be made before doing the necessary work.' The legal fight with the state has been going on since late last year and the towns, which represent about 72,000 people in total, are still waiting for a court date. As of early June, the government hadn't sent experts to review local damage. The municipalities are prepared to take their case to the European Court of Human Rights if they lose, according to Rodriguez, the mayor of Presles-en-Brie. 'We have little hope that our legal appeal will eventually succeed,' he said. 'But the residents welcome our action and the fact that we're at least trying to make ourselves heard.' BLOOMBERG
Business Times
a day ago
- Business Times
Oversupply from China to cut Singapore construction material prices further in Q2
[SINGAPORE] Prices for some construction commodities in Singapore are tipped to fall further in the second quarter, with steel rebar prices forecast to fall 13 per cent year on year driven by oversupply and competitive exports from China. This could benefit developers, builders and other construction contractors, though new tariffs may disrupt global supply chains in the near term, a report by construction consultancy Linesight said. Linesight predicted that prices for several key materials – such as copper, steel rebar, stainless steel, steel flat, cement and diesel – will dip in the second quarter of this year. Lower prices of between 1 and 13 per cent year on year follow corrections across most of the Asia-Pacific (Apac) in 2024. Steel rebar prices in Singapore, for instance, have been on a decline since Q2 2023. It is forecast to fall another 20.6 per cent in Q2, extending an estimated 19.7 per cent decline in the first quarter. Year on year, steel rebar prices are expected to be 13 per cent lower. The drop in steel rebar prices, in particular, is set to continue in most of Apac and Gulf Cooperation Council markets amid global trade tensions and uncertain local production, said Linesight. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Oversupply and competitive export prices, especially from China, puts pressure on regional steel rebar prices, it added. 'The imposition of US tariffs has inadvertently increased domestic steel availability, further contributing to price declines in some regions.' Prices of concrete, lumbar and plasterboard are estimated to hold steady in Q2, while that of bricks could inch up 1 per cent and aluminium up 6 per cent. Aluminium prices had fallen in the previous year – bucking gains in most of Apac – due to already high base prices, Linesight noted. But tight supply conditions, rising production costs and geopolitical factors turned the tide in 2025 with prices up seen creeping back up, it said. For the rest of this year, Linesight projects a -1 to +1 per cent price change for most of Singapore's construction commodities. 'Global geopolitical tensions continue to contribute to the overall inflationary risk premium in the construction industry,' said Linesight. 'Trade restrictions, tariff uncertainties, and raw material bottlenecks are creating unpredictable cost scenarios for developers and contractors. These factors, coupled with energy market volatility, are amplifying volatility in cost planning and procurement.' Easing wages The consultancy pointed out that labour inflation eased in Singapore as well, to 1.5 per cent in 2024, from 9 per cent in 2023. Still, shortages in structural skilled labour persist, putting pressure on the cost of construction, it said. Linesight added that mission-critical sectors are now facing inflationary pressures, with tight contractor availability and longer lead times for equipment. These include sectors such as data centres, renewable energy facilities and artificial intelligence-driven infrastructure projects. Overall, construction output is likely to grow steadily across Apac, with strong activity in data centres, infrastructure, industrial and energy sectors, Linesight's report showed. This is mainly driven by government spending, coupled with large scale projections and industrial expansion, it said. The region is poised to see the fastest growth of data centre colocation over the next five years, commanding a massive construction pipeline of US$56.4 billion. Singapore's construction industry is forecast to see average annual growth of 4.1 per cent from 2025 to 2028, up from 3.3 per cent in 2024, fuelled by investments in oil and gas, transport, and renewable energy projects. Construction contracts surged 34 per cent year on year in the first nine months of that year. The industry's projected improvement is further boosted by the government's push to achieve 2 gigawatt-peak of solar power by 2030 and carbon neutrality by 2050, said the consultancy. Billions of dollars have also been set aside for its Land Transport Master Plan 2040, which charts Singapore's land transport strategies, and the undersea energy cable project, it said.
