The FTSE ST All-Share Real Estate Investment and Services Index – which tracks nine listed property development firms – has surged nearly 14% this year, marking the strongest January performance since 2012, according to Bloomberg-compiled data.

The rally has outpaced a broader Bloomberg index of Asian real estate stocks by around 10 percentage points over the same period.

Singapore’s real estate sector has gained momentum, driven by a surge in private home sales and growing investor confidence amid easing borrowing costs.

Optimism is also fueled by expectations that funds tied to Singapore’s market reform initiative will flow into mid- and small-cap names, further boosting the sector.

“Real estate stocks in Singapore have garnered increasing interest over the past year, buoyed by a more favorable interest rate environment and resilient industry outlook,” Oversea-Chinese Banking Corp. analysts, including Andy Wong, wrote in a report.

Several companies in the sector “have been very active in capital recycling and reconstituting their portfolios, while also carrying out share buybacks.”