To The Moon

🏠 SG Property on Steroids (+67%): Why the "Smart Money" is Pivoting to REITs in 2026

The bears just got silenced.

If you were waiting for a property crash to deploy capital, you missed the boat. The data is out: New home sales in Singapore exploded by 67.3% in 2025, hitting 10,821 units—the highest level since 2021.

This isn’t just a "dead cat bounce." This is a structural confirmation that Singapore’s liquidity is massive, and buyer confidence is practically bulletproof.

But here is the twist: While retail investors are queuing at showflats to lock up millions in illiquid assets, sophisticated traders are looking at the massive valuation gap in the stock market.

Here is the deep dive on why S-REITs might be the trade of the year.

1️⃣ The "Great Divergence" Opportunity

We are currently seeing a rare disconnect in valuations:

 * Physical Market: Prices are resilient, near all-time highs, and rental yields for private condos are often compressed (2%–3% net).

 * REIT Market: Many high-quality S-REITs are still trading below book value with dividend yields sitting in the 5%–6% range.

The Insight: Why would you buy a physical condo yielding 2.5% (with stamp duty friction and zero liquidity) when you can buy a basket of prime commercial/retail assets yielding 5.5% with instant liquidity?

The "Smart Money" trade for 2026 is closing this gap. As rates stabilize, REIT yields will compress (prices go up) to match the physical market's reality.

2️⃣ What 10,000+ Sales Tells Us About the Economy

The sheer volume of transactions (10,821 units) signals that the underlying economy is much stronger than headline GDP might suggest.

 * Wealth Effect: High property turnover unlocks equity. People selling older HDBs/condos for profits act as a capital injection into the broader economy.

 * Retail Spending: New homes = renovation, furniture, and suburban spending. This is a direct bullish signal for Suburban Retail REITs (like Frasers Centrepoint Trust or CICT) that anchor these residential hubs.

3️⃣ The Risk of Policy Intervention (The "Cooling" Factor)

This is the contrarian take no one talks about.

When property volumes heat up this fast (+67%), the risk of government cooling measures spikes.

 * Scenario: If the government steps in to cool physical prices in 2026, capital often rotates out of physical real estate speculation and into high-yield equities (REITs & Banks).

 * The Hedge: Owning S-REITs is effectively a hedge against property tightening measures. You get the exposure to Singapore real estate without the direct regulatory bullseye that developers face.

4️⃣ The 2026 Interest Rate Playbook

In 2024/2025, the fear was "Higher for Longer."

In 2026, the narrative is shifting to "Stability and Cash Flow."

S-REITs have already absorbed the worst of the rate hike damage (devaluation of assets). Now, they are poised for DPU (Distribution Per Unit) growth as rental reversions turn positive. The physical market has already priced in the recovery; the REIT market hasn't fully caught up yet.

💡 The Verdict: Buy the "Paper," Not the "Concrete"

The 67% surge in home sales is impressive, but it feels like a crowded trade. The entry price is high, and the yield is low.

The Contrarian Bull Case:

The stock market is currently mispricing the resilience of Singapore's real estate assets. S-REITs offer a "Catch-Up Trade." If the physical market is booming, the REITs owning the malls, offices, and logistics hubs supporting that market must eventually re-rate higher.

Market Stance: 🟢 Bullish on S-REITs / Neutral on Developers

(Developers face policy risk; REITs enjoy the yield spread).

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