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Property cooling measures likely to push up rents, but have little impact on mass market condo prices: Experts

SINGAPORE — With the latest cooling measure doubling the Additional Buyer’s Stamp Duty (ABSD) for foreigners, and Singaporeans and permanent residents paying a higher rate as well, property analysts said that rental prices are likely to jump.

A view of private property in the city district of Singapore.

A view of private property in the city district of Singapore.

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  • The latest cooling measures will likely result in a jump in rental prices, property analysts said
  • This is because foreigners might opt to rent
  • Owners of public flats may also choose to rent before upgrading to a private property to avoid paying the Additional Buyer's Stamp Duty
  • The duty was increased on April 27
  • The analysts said that the mass market is unlikely to be affected because demand is largely driven by owner-occupiers who do not need to pay the duty

SINGAPORE — With the latest cooling measures doubling the Additional Buyer’s Stamp Duty (ABSD) for foreigners, and Singaporeans and permanent residents paying a higher rate as well, property analysts said that rental prices are likely to jump.

They gave various reasons for this, such as foreigners opting to rent instead of owning a home, and flat owners renting before upgrading to a private property to avoid paying the duty.

Close to midnight on Wednesday (April 26), the Government announced its highest ABSD rate increase since it was first introduced in 2011.

Foreigners who buy any residential property here will have to pay 60 per cent of the property’s purchase price, up from 30 per cent.

Singaporeans buying their second residential property pay 20 per cent, up from 17 per cent.

The changes took effect on Thursday.

In a joint statement, the Ministry of National Development, Ministry of Finance and Monetary Authority of Singapore (MAS) pointed out that there was growing demand for property among investors here and abroad, and that the cooling measures are to “promote a sustainable property market”.

Commenting on the changes, property analysts are expecting rental charges for housing to spike, though there were also those who felt that the increase might be muted — in line with MAS’ forecast of the rental market released on Wednesday in its macroeconomic review.

MAS said in its bi-annual report that the growth in rental prices would dampen in the second half of the year as an influx of new residential units may slow rental demand.

As for people looking to buy private property, the analysts said that the latest cooling measures would not affect the sale of mass market condominiums.

This is because most housing hunters would be first-property buyers not affected by the higher ABSD — with one analyst from real estate agency PropNex Realty saying that its internal data suggests just 1.5 per cent of transactions involved foreigners.

Ms Christine Sun, OrangeTee and Tie's senior vice-president of research and analytics, said: “(Private property) sales volume will usually drop for about three to six months (after a cooling measure), but it will rebound after that.”

These market shifts will “take effect immediately” after the ABSD increase, alongside a slowing growth in property prices, she added.

Historically, prices have never fallen after an increase — only when the Total Debt Servicing Ratio was adjusted, she observed. Last revised in September 2022, the Total Debt Servicing Ratio stipulates that all debt obligations, including housing loans, cannot exceed 55 per cent of a person’s income.


Elaborating on why the higher ABSD will push up rental prices, the analysts said that 60 per cent is likely too big a bullet to bite for some foreigners, so they may choose to rent while waiting to get their citizenship or permanent residency — allowing them to avoid the ABSD or pay a smaller amount.

This increased demand for rental housing will then drive up prices.

Mr Lee Sze Teck, senior director of research at real estate firm Huttons Asia, said: “Anecdotally, there are foreigners who rent, with an option to purchase the home once they become a permanent resident or citizen.”

He estimates that rental charges will grow around 10 per cent this year.

Ms Sun said that owners of Housing and Development Board (HDB) flats may rent short-term while waiting in the period between selling their flat and buying a private property, to avoid paying the ABSD.

“Some of those who intend to buy only one private home and later sell their flat may be affected (in having to pay the ABSD). Although they do not need to pay duty, they still need to pay it upfront and later seek remission upon selling their flat.

“Some may find the upfront ABSD payment to be too high. Therefore, those who wish to upgrade may need to sell their flat then rent somewhere first, resulting in higher costs incurred.”

For instance, an upgrader who owns a HDB flat and intending to buy a S$2 million condominium will have to first fork out S$400,000 in ABSD, which can be prohibitive for some.

Ms Tricia Song, head of research for Southeast Asia at real estate firm CBRE, said that the overall rental market may be further affected in the long run.

“As investment demand is likely to be altered by (the cooling measures), there could be fewer private homes for rent in the longer term.

“Demand could then spill over to commercial operators such as co-living or serviced apartments,” she added.


Analysts who spoke to TODAY are not expecting the latest changes to move the needle significantly on the demand or prices of mass market condominiums.

Mr Ismail Gafoor, chief executive officer of PropNex Realty, said: “The impact of the latest measures will not be evenly felt, with foreign buyers in particular taking a bigger hit.

“We think the impact of the ABSD rate hike on the mass market will not be significant as foreigners accounted for only 1.5 per cent of the private home purchases in the mass market in the whole of 2022.”

Another analyst agreed, saying that unlike investors who may adopt a wait-and-see approach, buyers who are primarily getting a property for their own occupation may still be active in the mass market, especially first-time buyers. 

Mr Mohan Sandrasegeran, senior analyst for research and content creation at One Global Property Services, said: “Overall, affordable private properties, such as condominium units that are priced within their budget and offer desirable amenities in accessible locations, may still be in demand, albeit at a slower pace.”

However, the experts had mixed views on the impact on the HDB resale market, with some predicting that there may be no shifts.

Mr Nicholas Mak, chief research officer at property technology company, said that there may be higher demand for bigger or better-located HDB flats once people ditch their plans to own and live in private housing as a result of the new changes.

Or, some of these “upgraders” may delay plans, which may lead to a lower resale volume of HDB flats “for a few months”, he added.



Seller’s Stamp Duty is imposed on properties sold within four years of purchase — up from three years. It is payable regardless of whether the property is eventually sold at a gain or loss.

To discourage investors looking to make short-term gains, the duty levied on property sold on or after Jan 14, 2011 goes up sharply to:

  • 16 per cent for residential property sold in the first year of purchase
  • 12 per cent if sold in the second year of purchase
  • 8 per cent if sold in the third year of purchase
  • 4 per cent if sold in the fourth year of purchase

The loan-to-value limit, which determines the maximum amount a person can borrow from a financial institution for a housing loan, is tightened from 70 per cent to 60 per cent. This means that the maximum loan amount buyers can get will be 60 per cent of the property purchase price.


To moderate investment demand for private residential property and to promote a “stable and sustainable” market, the Government introduces the Additional Buyer's Stamp Duty (ABSD).

  • Foreigners buying any residential property have to pay 10 per cent of the property purchase price or market value, whichever is higher
  • Permanent residents buying their second or subsequent properties have to pay 3 per cent
  • Singaporeans buying their third or subsequent properties have to pay 3 per cent


As low interest rates and rapid credit growth drive up the prices of residential property, the central bank caps the tenure of all residential property loans at 35 years.

The loan-to-value limit is tightened for borrowers with tenures exceeding 30 years, or if the loan period extends beyond the retirement age of 65 years.

For a borrower with one or more outstanding housing loans, the limit is 40 per cent. For a borrower without any outstanding housing loan, it is 60 per cent.

A new limit is imposed on the loan period for borrowers looking to refinance their loans — when added with the number of years since the loan was first granted, the total number of years cannot exceed 35 years.


Across the board, ABSD rates are raised.

For Singaporeans:

  • A 7 per cent ABSD for their second property is introduced
  • ABSD goes up from 3 per cent to 10 per cent for the third and subsequent property

For permanent residents:

  • A 5 per cent ABSD for their first property is introduced
  • ABSD on their second and subsequent property goes up from 3 per cent to 10 per cent

Foreigners buying any residential property have to pay 15 per cent, up from 10 per cent.

The loan-to-value limit on housing loans is also tightened for those with more than one existing housing loan.

The Government introduces measures to moderate demand for HDB flats. They include:

  • Tightening the eligibility for loans to buy HDB flats
  • Disallowing permanent residents from subletting their whole flat
  • Requiring permanent residents to sell their flat within six months of buying a private residential property here

Cooling measures kick in for executive condominiums, such as capping the strata floor area at 160 sqm. Executive condominiums are public-private housing developed and sold by private developers but are subsidised by the Government.


The Total Debt Servicing Ratio is introduced to encourage financial prudence among borrowers.

Financial institutions have to take into account monthly repayments that the borrower have to make, and other monthly repayments from other debts, among other things.


With immediate effect, the tenure for HDB housing loans is reduced from 30 years to 25 years.

A day after that, the Mortgage Servicing Ratio limit — which restricts the amount a person’s gross monthly income can go towards home loan repayments — is reduced from 35 per cent to 30 per cent.

Permanent residents who want to buy a resale HDB flat can do so three years after getting their residency.


To stabilise growing demand in the executive condominium market, the Government introduces a resale levy for second-timer applicants who buy them directly from property developers.

The central bank also caps the Mortgage Servicing Ratio for housing loans for executive condominiums at 30 per cent of a borrower’s gross monthly income. 


Seller’s Stamp Duty is payable when people sell their flats within three years of ownership, shortened from four years.

This is after the number of property sales within the four-year window has fallen significantly over the years since the cooling measure was introduced.

The amount of duty paid is also reduced. Those who sell properties within three years have to pay 4 per cent, while those who sell their property within a year have to pay 12 per cent.

The Total Debt Servicing Ratio no longer applies for mortgage equity withdrawal loans with a loan-to-value ratio of 50 per cent and below, after the Government received feedback that it limited the flexibility for some people to monetise their properties in their retirement years.


As the property market heats up, ABSD rates are raised for buyers and entities such as property developers.

ABSD for Singaporeans buying their second home rises from 7 per cent to 12 per cent, while those buying their third or subsequent home have to pay 15 per cent instead of 10 per cent.

Permanent residents buying their second property also have to pay a higher ABSD of 15 per cent, up from 10 per cent.

As for foreigners buying any property, ABSD goes up from 15 per cent to 20 per cent.

The loan-to-value limit is also tightened by 5 percentage points for all housing loans granted by financial institutions, except for those granted by HDB.

For a buyer’s first housing loan, for instance, the limit becomes 75 per cent (down from 80 per cent), or 55 per cent (down from 60 per cent) if the loan tenure is more than 30 years or extends past age 65.


Despite the economic challenges brought on by the Covid-19 crisis, prices for both public and private housing continue to rise over 2020 and 2021. 

The Government tightens the loan-to-value limit for HDB housing loans from 90 per cent to 85 per cent.

Singaporeans buying their second property have to pay 17 per cent of the property price for ABSD instead of 12 per cent.

As for those buying their third unit and more, they must pay 25 per cent, up from 15 per cent.

Permanent residents and foreigners have to pay more of the duty.

The Total Debt Servicing Ratio is lowered from 60 per cent to 55 per cent. 


In response to what the Government said was a clear upward momentum in HDB resale prices, cooling measures are imposed.

For instance, a rule is introduced for private property owners that require them to wait for 15 months after selling their property before they can buy a non-subsidised HDB resale flat.

To help buyers borrow money prudently and ensure that they will not have difficulties repaying it, the loan-to-value limit for loans taken with HDB is lowered from 85 per cent to 80 per cent. 


The newest round of cooling measures is imposed with renewed interest by investors here and abroad in Singapore’s residential property market.

ABSD for foreigners buying any property is raised from 30 per cent to 60 per cent.

Singaporeans buying their second residential property pay 20 per cent, up from 17 per cent.

For those buying their third and subsequent property, as well as permanent residents getting their second home, the ABSD is raised from 25 per cent to 30 per cent.

Property cooling measures
Samuel Woo/TODAY


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Samuel Woo/TODAY

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