SINGAPORE — A new research report released by DBS forecasts new private homes to cost between S$2,300 and S$2,900 per square foot (psf) by 2030 – sharply higher than the current S$1,500 psf.

This comes on the back of a population of between 6.3 million to 6.5 million by then.

The projection means an average private property unit will cost between S$1.9 million and S$2.5 million by 2030.

The report also projected the average size of new private units to shrink to 840 sq ft by 2030, 20 per cent smaller than the 1,083 sq ft average last year.

HDB upgraders will be a “key driver” for demand. New families will also contribute to demand for homes.

However, risks such as slower population growth, immigration policies, and macro-economic uncertainties could potentially throw a spanner in the works, the DBS report noted.

“In addition, the sector is also susceptible to policy risk which could have an impact on demand for property,” they added. If the population grows at a slower pace, the demand for home will also lessen.

If home prices run up too quickly, it may also prompt the government to consider tightening measures.

Other analysts, however, felt the price projections were too optimistic and that much depends on social and economic conditions in the run-up to 2030.

Most analysts expect property prices to rise in the short term, but too many variables including the economy and external shocks make it unlikely for the market to be on a 12-year uptrend.