BCA estimates building demand will increase to $38B by 2024
The Building & Construction Authority estimates that in 2024 the total construction demand for the country will be between $22 billion and $38 billion nominally, which is higher than the figure of $33.8 million from 2023.
BCA had projected $27 to $32 billion for the full year in January 2023. The preliminary figure of $33.8bn exceeded that projection. BCA attributes part of the increase in demand for construction in 2023 to higher tender prices and expedited construction awards in several private residential projects, as well as HDB’s ramping up public housing projects.
The public sector’s construction demand is expected to reach $19.5 billion by 2023. This will be driven by major projects such as the Cross Island MRT Line Phases 1 and 2, institutional building developments, and HDB Built-to-Order developments.
The private sector construction demand increased from $12.5 billion to $14.3 billion between 2022 and 2023, mainly due to the residential developments that were made under Government Land Sales and previous en-bloc sites.
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In 2024, the public sector will contribute between $18 billion to $21 billion in projects. The public sector will be awarding major projects in 2024, including HDB’s BTO developments, Cross Island MRT Line Phase 2 contracts, infrastructure for future Changi Airport Terminal 5 developments, Tuas Port development, as well as other major road and drainage improvement works.
The private sector is expected to contribute between $17 billion and $14 billion by 2024. BCA expects the private sector to be primarily driven by residential developments sold through the GLS program, the expansion of two Integrated Resorts and the redevelopment and repurposing of mixed-use property such as Singtel’s Comcentre and Central Mall.
BCA’s group director for strategic planning and transformation, said that the demand for commercial construction in both the public and private sectors will grow the most, with a growth of $3.4 billion by 2023, to $5,9 billion and $6.6 billion projected in 2024. Teo spoke at the BCA REDAS Built Environment & Property Prospects Seminar, held on January 15.
The demand for civil engineering construction is expected to grow substantially, from $7.6 Billion in 2023 to $7.9 to $9 Billion this year.
The private residential construction market also decreased, from $7.6 to $3.7 billion and $4.5 billion. This fall in demand for construction could be due to the moderation in buyer demand caused by the lower land supply from previous en-bloc sites.
The annual construction demand is expected to range between $31 and $38 billion in 2025-2028.
BCA states that the public sector is expected to continue to be the leading contributor to the demand, and will contribute between $19 billion and $23 billion annually from 2025-2028. Public sector projects are expected to be 70% building projects and 30% civil engineering projects.
The major developments include MRT Projects such as Cross Island Line Phase 3 and Downtown Line Extension from Sungei Kadut to Alexandra Hospital, integrated developments in Siglap South, Toa Payoh and a new integrated Hospital in Bedok.
BCA expects the private construction sector demand to be stable at $12 to $15 billion per year between 2025 and 2028.
