Singapore business sentiment recovers as residential rents forecast to remain flat

Singapore's business sentiment showed signs of recovery in the second quarter of 2026. According to a Singapore Business Federation (SBF) poll, the Business Sentiment Index rose by two points to 53, reversing a decline seen in the first quarter. The improvement is attributed to resilient domestic growth, investments in artificial intelligence, and moderating cost pressures following energy disruptions linked to Middle East tensions.

While sentiment improved across various sectors, including banking, insurance, and manufacturing, the overall outlook remains cautious with neutral sentiment. The retail, education, and wholesale trade sectors reported the lowest levels of optimism.

In the residential real estate sector, private home rents in Singapore are forecast to remain largely flat through 2026. Although leasing transactions for private residential properties rose by 5.1% quarter-on-quarter in Q2 2026, Savills reports that mixed demand drivers and economic uncertainty are tempering rent growth. While demand for high-end homes remains steady among certain expatriate groups, rents for smaller units in the Rest of Central Region and Outside Central Region saw slight declines.