TLDR
Since 2009, Singapore has implemented over 15 rounds of property cooling measures to curb speculation and keep homes affordable. These include tightening loan-to-value (LTV) ratios, raising Additional Buyer’s Stamp Duty (ABSD), introducing the Total Debt Servicing Ratio (TDSR), shortening loan tenures, and imposing higher taxes on foreign buyers and those with multiple properties. Despite these steps, both HDB and private home prices have risen sharply—by about 88% and 106% respectively. The latest measures in August 2024 lowered the LTV for HDB loans to 75%, matching bank loans, and increased housing grants to support buyers. Whether to buy, sell, or wait depends on individual goals and market conditions. The key takeaway: cooling measures may slow price growth, but long-term price appreciation remains resilient in Singapore’s property market.
Since 2009, there have been at least 15 property cooling measures implemented in Singapore.
Throughout the years, the Government has rolled out multiple rounds of property cooling measures to ensure that homes remain affordable and to mitigate speculation in Singapore’s real estate market.
Nevertheless, both HDB flats and private properties have seen significant price increases since 2009. Resale HDB flats have risen approximately 87.9% since that year, while private property prices have surged by 106.1% over the same timeframe.
The most recent set of property cooling measures was announced during Prime Minister Lawrence Wong’s first National Day Rally speech in 2024, where he lowered the Loan-to-Value (LTV) ratio for HDB flats from 80% to 75%, while also increasing the Enhanced CPF Housing Grants (EHG) for homebuyers.
The primary aspects of Singapore’s property cooling measures, set against the backdrop of the Global Financial Crisis, included the elimination of the Interest Absorption Scheme (IAS) and the Interest-Only Scheme (IOS).
The Interest Absorption Scheme (IAS) permitted property purchasers to postpone loan instalments after making an initial downpayment until the completion of their units. Before this completion, only interest payments were required by the bank, which were covered by the developers.
In a similar vein, the Interest-Only Scheme (IOS) is a type of home loan that does not necessitate repayments on the principal amount.
For properties that were not yet completed, the interest-only period was generally provided until the properties received a Temporary Occupation Permit (TOP).
A Seller’s Stamp Duty (SSD) was implemented on all residential properties and lands acquired on or after 20 February 2010, and resold within a year of purchase. The rates are as follows:
Additionally, the Loan-to-Value (LTV) limits were reduced from 90% to 80% for all bank home loans, encompassing private residential properties, Executive Condominiums (ECs), HUDC flats, and HDB flats, including DBSS flats.
The Seller’s Stamp Duty (SSD) will now apply to properties sold within a period of 3 years rather than the previous 1 year.
Additionally, property purchasers with an existing home loan are required to make a minimum cash payment of 10%, up from the previous 5%, and their loan-to-value ratio (LTV) will be reduced from 80% to 70%.
The duration for the Seller’s Stamp Duty (SSD) has been extended from 3 years to 4 years. The SSD rates have also been increased to:
One of the most costly property cooling measures was implemented in December 2011, targeting foreigners and non-individuals with a 10% tax; Singapore Permanent Residents acquiring their second residential property faced a 3% tax; and Singaporeans purchasing their third residential property were also subjected to a 3% tax.
A new maximum limit of 35 years has been established for all residential property loans, applicable to both individuals and non-individuals. For those refinancing, the total of the new loan duration and the years since the initial loan was issued cannot exceed 35 years.
Additionally, the Loan-to-Value (LTV) ratio has been decreased for individuals with a loan term exceeding 30 years or those who would be over 65 years old by the time their loans are repaid:
ABSD rates have been increased universally:
Additionally, LTV limits have also been tightened:
The Total Debt Servicing Ratio (TDSR) accounts for all debts when assessing the amount individuals are eligible to borrow for property purchases. This threshold is established at 60% of their gross monthly income.
Due to a notable decline in property sales within the four-year timeframe, the Government has shortened the SSD period to three years, down from the previous four years. The updated SSD rates are as follows:
The ABSD rates have been raised as follows:
LTV limits for bank loans have also been tightened:
The ABSD rate has been raised once more:
Additionally, the TDSR has been tightened from 60% to 55%, and the LTV ratio for HDB loans has been decreased from 90% to 85%.
A higher interest rate was presumed for evaluating borrowers’ capacity to repay, which was used to calculate the TDSR and MSR:
The LTV limit for HDB flats has also been reduced from 85% to 80%.
The Additional Buyer’s Stamp Duty (ABSD) has been increased once more. Now, foreigners are required to pay a 60% ABSD.
In the most recent set of property cooling measures, the loan-to-value (LTV) limit for HDB loans has been reduced to 75%, aligning it with the current rates for bank loans.
As noted at the beginning of the article, this adjustment was made alongside an increase in the Enhanced Housing Grant (EHG) to help homebuyers manage their downpayment without overextending their finances.
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.
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