Your search results

Singapore’s Property Market: Will the Newly Proposed 2023 Cooling Measures, Including a 60% Foreigner ABSD, Make Waves or Mere Ripples?

Posted by Jayson Ang on April 27, 2023

| 0

TLDR

The recent surge in Additional Buyer’s Stamp Duty (ABSD) rates in Singapore targets mainly foreigners and entities, with rates skyrocketing to 60% and 65%, respectively. This move aims to cool the sizzling real estate market by deterring affluent foreign investors from the pool of potential buyers. The impact on property owners, especially in the Core Central Region (CCR), includes a shrinking buyer pool for foreign buyers but potential growth in the rental market. The new measures may also shift local interest towards CCR properties as competition with wealthy foreign buyers decreases. Overall, experts predict a deceleration in price surges and advise against waiting for discounts as underlying demand remains robust despite the increased ABSD rates.

Like a sudden gust of winter chill, a fresh batch of cooling measures has descended upon us. In a predictable fashion, it was unveiled under the cover of midnight darkness, leaving no room for swift response or reaction. 🤣

ABSD rates have once again taken a leap, a predictable move with home prices still reaching the skies. However, this time, there’s a twist. The plot thickens as foreign buyers are being singled out with an unexpected blow, with their ABSD rate shooting up twice the usual amount, unlike Singaporeans who only experience a three percent rise for their second home purchase.

With the recent spike to a mere 30 per cent in the December 2021 cooling measures, the latest surge to 60 per cent might appear as a formidable barrier for affluent foreigners.

An ABSD Increase That Mainly Targets Foreigners And Entities

The new ABSD rates in Singapore are in full effect. Singapore Citizens purchasing a second property will now face a 20% tax, while those purchasing a third or more will face a 30% tax.

Permanent Residents, on the other hand, will have to pay 30% for their second property and a whopping 35% for their third or subsequent property.

Foreigners and non-developer entities will feel the heat as well, with ABSD rates skyrocketing to 60% and 65%, respectively.

And for those of you thinking of buying property on trust, beware! The 65% tax on entities applies to trust purchases as well.

Don’t forget, the ABSD rates for the first property remain unchanged for Singapore Citizens and PRs, and developers will still be hit with a 35% tax.

Keep these new rates in mind before you make your next big property purchase!

The Decision To Target Foreigners Is Unexpected

In the latter part of last year, I emphasized the small presence of foreign buyers in property transactions, with only 3.3 per cent and 0.4 per cent attributed to them and entities, respectively. Aside from the minor statistics, there’s also the intrigue surrounding the specific types of properties that these international buyers tend to favor.

As per my observations of many seasoned realtors, foreign buyers have a palpable appetite towards luxurious properties located in prime locations – such as the district 9 or 10 condominiums, or even the huge bungalows nestled in the scenic expanse of Sentosa Cove.

Frankly speaking, these affluent foreigners acquire the kind of real estate that would leave the average Singaporean envious and out of reach. Consequently, this is where certain real estate agents find themselves unable to explain or, unable to justify their decision to target such an exclusive demographic.

Moreover, although this tax may appear burdensome at first glance, it’s hardly a stumbling block for the uber-wealthy. The opulent and exclusive GCBs in this locale are beyond their purchasing power, and even the grandiose penthouses hardly command prices that can rival those of London or New York.

The surge of foreign investments in CCR condos has left the region vulnerable to the effects of the recent cooling measure. Ironically, this area has also experienced the least amount of price growth. A mere 3.6% increase in prices between 2013 to 2022, compared to the staggering 32% and 37% rise in RCR and OCR, respectively. It’s a curious case, where the very ones who bring in the investment could be the ones impacted the most.

As we contemplate the government’s actions, it is but a mere speculation that they possess knowledge beyond our comprehension. On the ground observations may follow : an slow down of a mad dash towards security, where affluent foreigners may seek refuge in the safe-haven of Singapore’s property amidst the tumultuous climate.

As we ponder over the possible reasons, one factor that stands out is the surge in regulatory measures in certain foreign banking sectors, in the aftermath of the downfall of some financial institutions in the United States. However, this stringent regulatory climate has led to an unexpected outcome, as affluent clients have started exploring alternative avenues to park their wealth, owing to a hasty and impulsive response.

The government’s move to eliminate affluent foreign investors from the pool of potential buyers of resale properties is aiding in cooling the sizzling real estate market.

Perhaps, this action may have been triggered by the response of some nations to protect their real estate values from affluent foreigners.

Take Canada, for instance, they’ve implemented even more severe measures by prohibiting foreigners from acquiring homes for a period of two years. Nevertheless, in regions like Ontario and British Columbia, where housing prices reach peak levels, non-Canadian inhabitants represent less than 6% of the total population.

Therefore, it’s not as though they are a significantly large portion of the demographic.

Potential Impact On Property Owners

The CCR property owners are playing a game of high risk, as the current scenario has left the foreign buyers uninterested, causing a significant shrink in the potential buyer pool. However, there is a bright side to this- the CCR rental market could flourish due to this predicament. The experts in the real estate industry predict that a larger chunk of foreigners will be keen on renting, as the massive tax has left them with no other option.

While some may find it comforting, not all CCR investors are keen on becoming landlords. Nonetheless, this latest development may rekindle local interest in the CCR. Should property prices stabilize in the affluent districts and the gap between RCR or OCR closes in, more Singaporeans might deem central region condos as an attractive purchase. Especially since the competition with wealthy foreign buyers has dwindled down to a mere few.

It’s worth noting that as Executive Condominiums (ECs) approach their 11th year, it may not bode well for them. The sky-high ABSD rates for foreigners and entities have somewhat diminished the once-great advantage of being able to sell ECs to them.

Although, it’s safe to say that since there hasn’t been much interest from foreigners in ECs, the impact may not be significant. On a broader note, the 20 per cent ABSD hike for Singapore Citizens buying a second home is unlikely to cause a seismic shift in the market.

According to the majority of real estate agents, HDB upgraders are the driving force behind the market’s momentum. However, an interesting shift may be on the horizon as more potential buyers opt to sell their flats prior to purchasing a condominium, thereby bypassing the upfront ABSD payment. This has the potential to not only benefit the rental market but also accommodate those in need of temporary lodgings as a result of buying before selling.

The consensus among real estate experts is that a deceleration in price surges is on the horizon, as historically, buyers tend to adopt a cautious stance after the implementation of cooling measures. Nevertheless, there is one outlier amongst the realtors who scoffs at the notion of a price slump and deems it too optimistic.

Before the new cooling measure, the developer had already taken into account the land costs, development costs, and marketing costs in their pricing strategy, which had already been settled. Despite the increase in ABSD, most of them are unable to offer a reduced price. Nevertheless, the underlying demand remains robust, as the number of second or third home buyers is relatively small.

Although the pace of price hikes may decelerate, adopting a wait-and-see strategy for discounts is unlikely to be profitable.

As a seasoned real estate agent highlighted, waiting proved fruitless even during the previous cooldown in 2018. Meanwhile, on the developer front, insiders whispered that while an increase in Additional Buyer’s Stamp Duty (ABSD) could influence the speed of new launches’ sales, developers face graver issues. The most pressing of which are depleted land stocks, amplified Land Betterment Charges, and an escalating interest rate climate.

Instead of resorting to raising ABSD, rectifying the underlying issues presents a more pragmatic and potent approach to cooling the property market.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …

All Opinion

What Might Occur If We Ease Property Cooling Measures?

Jayson Ang – July 21, 2025 –

TLDR To assess if Singapore’s property cooling measures are working, compare our actions with China, which is applying the opposite...

All Buying Tips Opinion

5 Unexpected Factors That Make Some New Launch Condos Sell Like Hotcakes

Jayson Ang – August 9, 2024 –

TLDR The Singapore property market for new condo launches in 2023 saw varying degrees of success. Factors like limited competition,...

All Buying Tips Reports Selling Tips

Breaking the New Launch Conflict: Leasehold or Freehold?

Jayson Ang – October 9, 2025 –

TLDR Freehold properties in Singapore offer indefinite ownership but come with a 15–25% premium over 99-year leasehold units. Despite common...

All Buying Tips Opinion

Three Singaporeans Share Their Experiences of Co-Owning a Property with Friends

Jayson Ang – March 18, 2025 –

TLDR In Singapore, some individuals venture into property investments with unrelated partners, driven by opportunities and personal circumstances. Jim, leaving...

Mandarin Top 5

Top 5 Factors to Consider When Choosing a Property in Singapore

Jayson Ang – May 15, 2023 –

The top 5 factors to consider when choosing a property in Singapore. Whether you're a seasoned investor or a first-time...

All Blog Posts Buying Tips

5 Risks Upgraders Should Be Aware of To Avoid Financial Troubles When Progressing Their Property

Jayson Ang – July 3, 2023 –

TLDR The article delves into the intricacies of property asset progression in Singapore's real estate market. It highlights the risks...

Mandarin Top 5

Top 5 Best Unique Nighttime Experiences in Singapore

Jayson Ang – December 13, 2024 –

Singapore, a vibrant city-state known for its stunning skyline and diverse culture, truly comes alive at night. As the sun...

All Opinion Selling Tips

Selling Your Singapore Condo? Don’t Overlook This Critical Factor

Jayson Ang – March 14, 2026 –

TLDR When selling a condo in Singapore, the number of units listed in the same development plays a crucial role....

Mandarin Top 5

Top 5 Places to Learn About Singapore’s Diversity

Jayson Ang – August 31, 2024 –

Singapore, a vibrant city-state in Southeast Asia, is well-known for its diverse culture and rich history. A melting pot of...

Mandarin Top 5

5 Reasons : Why Investing In Singapore Property Is The Best Decision I Ever Made

Jayson Ang – May 10, 2024 –

Investing in property is a great way to build wealth and secure a stable source of passive income. When it...

Mandarin Top 5

The Future Of Singapore Property Investing: 5 Trends To Watch Out For

Jayson Ang – July 10, 2024 –

The future of Singapore's property market is shaped by several emerging trends that reflect cautious optimism, enviable locations, and sociable...

Mandarin Top 5

Top 5 Boutique Shopping Streets in Singapore

Jayson Ang – July 22, 2024 –

Singapore, a cosmopolitan city-state known for its vibrant culture and diverse shopping scene, offers a unique blend of modern malls...

All Buying Tips Selling Tips

Discovering the Response of Private Property Owners towards the 15-Month Wait-Out Phase

Jayson Ang – August 25, 2023 –

TLDR The blog post discusses the impact of the 15-month wait-out period cooling measure on private property owners in Singapore....

All Buying Tips Opinion

Beyond the Premium: Why Some Singaporean Homebuyers Steer Clear of Top-Floor Properties

Jayson Ang – July 7, 2026 –

TLDR Top-floor condominium units in Singapore often come at a premium price and are associated with luxury, but they have...

Mandarin Top 5

Top 5 Reasons : How Can A Reputable Real Estate Agent Help You When Investing In Singapore Property

Jayson Ang – May 20, 2025 –

Investing in Singapore property can be a lucrative venture, given the country's stable economy, strategic location, and high demand for...

All Buying Tips Opinion Selling Tips

Singapore’s Property Jungle: A Guide to Every Development Type

Jayson Ang – October 12, 2025 –

TLDR Singapore’s real estate market features a diverse mix of property types—public HDB flats, executive condominiums, private condos, landed homes...