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Policy Watch Singapore: Pre-emptive Measures to Cool the Residential Market

Xian Yang Wong • 27/04/2023

Additional Buyer’s Stamp Duty (ABSD) Rates Increased for the Fifth Time

To pre-emptively cool off residential property demand amidst renewed interest from local and foreign investors, the Government has raised ABSD for foreigners, 2nd /3rd timer Singaporeans and Permanent Residents. The adjusted ABSD rates, summarized in the following table, will take effect on April 27.

ABSD rates table

Over the short term, the overall market volumes could take a breather, as the market absorbs the latest cooling measures. Some buyers might wait on the sidelines in anticipation of a price correction.

Prices could continue to Grow

The latest measures would not affect the bulk of owner occupier demand whom are the dominant source of property demand in Singapore. Singapore citizens and permanent residents buying their first properties are estimated to constitute about 90% of residential property transactions (based on 2022 transactions) according to data from the Ministry of National Development.

As such, we remain cautiously optimistic that private residential prices may still end 2023 on a positive note, with overall prices ending at 2%-5% higher compared to 2022. Price growth would be supported by resilient underlying demand, fueled by local aspirations to upgrade to a private property, stable jobs market, rising HDB resale prices and heightened construction costs. However, the increasing weight of cooling measures and higher levels of new private residential completions would deter some buying demand and ease rental growth.


Learn more by downloading the full report.

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