I'm sure that like me, most of you have heard about the rising tension in the Middle East. It's all over the news and social media. But we're not here to talk about the political issue itself. In this article, we'll discuss how all this can affect our property market.

Typically, when geopolitical tensions flare up, the first markets to react are usually oil, stocks, and currencies. And clearly, the recent escalation of conflict involving Iran and Israel has already rattled global energy markets and shipping routes.

If the conflict drags on, it could disrupt the global economy, including Singapore's. The question is: could that disruption eventually spill over into our property market?

The short answer is: energy.

A significant portion of the world's oil and liquefied natural gas (LNG) passes through the Strait of Hormuz, a narrow waterway to the south of Iran. Disruptions there can affect roughly one-fifth of global oil trade and a significant share of LNG shipments. With several vessels in the region already affected by security incidents linked to the conflict, it's likely that prices may continue to spike.

So what does this mean for Singapore?

Well, given that we're a small economy that imports most of its raw materials, we're particularly exposed to the risks of global energy price shocks. Higher energy costs can feed into inflation and potentially delay interest rate cuts, both of which directly affect the property market.

To understand how such conflicts can affect property markets, it helps to look at the most recent geopolitical shock: the Russia-Ukraine war that began in 2022.

Russia is one of the world's largest exporters of oil and gas, and the conflict triggered higher fuel prices, rising electricity tariffs, and more expensive construction materials worldwide. So when the invasion started, global markets reacted almost immediately.

Oil prices surged to around US$126 per barrel in March 2022, due to fears of Russian oil sanctions. These pressures fed into Singapore's construction sector, where developers were already dealing with labour shortages and pandemic-related delays.

But interestingly enough, Singapore's housing market didn't collapse. In fact, within a year since the war broke out in February 2022, condo new sales went up by 28.8%. During this period there were 6,998 transactions across 85 projects.

Source: PropNex Investment Suite

This suggests that while geopolitical shocks create short-term uncertainty, they do not necessarily derail Singapore's long-term property trajectory.

We've established that historically, Singapore's housing market has shown a surprising degree of resilience during global crises. But why?

One key reason is our reputation as a safe-haven destination for capital. When geopolitical tensions rise, investors often move their money into countries with stable governments, strong legal systems, and reliable financial institutions. Singapore ranks highly in this regard.

And despite the 60% Additional Buyer's Stamp Duty (ABSD) on foreigners buying residential purchases, global investors still see Singapore as a stable place to invest.

In fact, following recent reported attacks in Dubai (a popular wealth hub amongst rich Asians), some wealthy individuals are already moving their assets out of the region and into Singapore. And many more are considering doing the same.

Another reason is that when inflation rises (and it typically does during crises), some investors turn to real assets like property as a way to preserve value over time.

Our housing market also benefits from several structural safeguards. The government closely manages the property market through cooling measures and land supply policies, which help prevent excessive speculation and sharp price swings.

If the conflict remains contained and lasts only a few weeks, the economic impact on Singapore's property market would likely be limited. The key factor here is whether the Strait of Hormuz opens up soon. If shipping goes back uninterrupted, any spike in oil prices could reverse relatively quickly once tensions ease.

In such a scenario, the most likely effect would be a short pause in buyer activity as investors adopt a wait-and-see approach. Once uncertainty subsides, demand tends to recover fairly quickly.

However, if the conflict goes on much longer, and the Strait of Hormuz remains closed, the global economy will be affected, and by extension, Singapore's property market.

If energy supplies are significantly affected, oil and gas prices could continue to go up, pushing inflation higher across many economies. In such an environment, central banks like the U.S. Federal Reserve may delay interest rate cuts, keeping global borrowing costs elevated for longer. For property buyers, this translates into higher mortgage rates and tighter affordability, which could weigh on overall housing demand.

Slower global growth could also dampen sentiment among developers and investors. Developers may adopt a more cautious stance by delaying new project launches, while buyers may hold back until there is greater clarity on the economic outlook.

At the same time, geopolitical instability could attract fresh capital inflows from high-net-worth individuals who previously kept assets in affected regions, much like the Dubai situation we discussed earlier. This could translate into renewed interest in the luxury and prime residential segments, where international buyers traditionally concentrate.

There could also be an increased interest from expats based in the Gulf region who may begin exploring relocation options in case regional tensions persist. Even a small wave of such enquiries could boost demand in Singapore's rental market and high-end residential sector.

Housing supply may also be affected if energy prices stay elevated. Developers may face higher construction costs such as materials, electricity, transport, and other building expenses. This may slow the pace of new housing supply and place upward pressure on new home prices, which will inevitably affect buyer affordability.

Commercial property and REITs could also face pressure if global business activity slows, particularly in sectors tied to trade, logistics, and office demand.

For buyers

In the short term, some sellers may feel uneasy and become more open to negotiation. This window may only last for so long until the market gets clearer signals from the conflict. If tensions ease quickly, buyer competition could return just as fast. Rather than playing the waiting game indefinitely, buyers may find opportunities to enter at more favourable price points.

For sellers

There's little reason to rush into lowering your price dramatically. Serious buyers have not disappeared. Many are simply taking a short pause while monitoring the situation. The key is to price your property realistically, present it well, and remain patient over the next few weeks.

For landlords and investors

It may also be worth preparing for potential demand from expats or investors relocating from the Gulf. Landlords with vacant units could consider getting them market-ready. On the other hand, investors exploring new purchases may want to keep an eye on prime residential areas such as Districts 9, 10, and 11, which traditionally attract foreign interest.

Geopolitical conflicts often create uncertainty, but history has proven how resilient our property market is.

In the short term, tensions from the Middle East may cause brief pauses in buyer activity as investors wait for clearer signals from the economy. But over the longer term, Singapore's fundamentals can help the property sector remain resilient even during periods of uncertainty.

If anything, moments like these often highlight why Singapore is viewed as a safe-haven market. When investors begin prioritising stability over risk, markets with good regulations like ours stand out.

While geopolitical tensions are unpredictable, Singapore's property market has consistently shown resilience. Not because it is unaffected, but because it is often seen as a place of stability during uncertainties.

Of course, navigating these conditions still requires a clear strategy. Property decisions should never be based purely on headlines or short-term market reactions. Instead, they should be grounded in long-term planning, careful timing, and a structured approach to wealth building.

This is where frameworks like the Property Wealth System (PWS) come in. Rather than trying to predict every global event, we focus on identifying the right property at the right stage of the market cycle, while aligning purchases with long-term financial goals.

In other words, geopolitical tensions may come and go, but you can still have a successful property investment if you have a clear strategy that works across different market conditions.