Latest Round of Cooling Measures: Additional Buyer’s Stamp Duty Doubled to 60% for Foreigners

manfred lau
7 min readApr 28, 2023


Since December 2021, this has been the third round of cooling measures. From April 27, foreigners will be subjected to 60% ABSD for any residential purchase, marking it the steepest increase ever.

Singaporeans buying their second residential property will pay an ABSD rate of 20%, up from 17%, while those buying their third and subsequent residential property will have to pay an increased rate of 30%, up from 25%.

Permanent residents (PRs) are also subjected to the same 30% when buying their second residential property. PRs buying their third and subsequent property will pay an ABSD of 35%, up from 30%.

While earlier measures in December 2021 and September 2022 have had moderating effects, property prices in the first quarter of 2023 showed renewed signs of acceleration amid resilient demand. Hence, this begets the question on whether this steep increment is warranted.

To answer this question, we need to first understand that the past 10 rounds of cooling measures since Sept 2009 has been aimed at achieving stability and that the housing market does not run ahead of economic fundamentals . This time round, a joint statement by the Ministry of Finance (MOF), the Ministry of National Development (MND) and the Monetary Authority of Singapore (MAS) stated that this steep increment in ABSD is necessary to prioritise housing for owner-occupation and pre-emptively manage investment demand.

The ABSD revisions are expected to help moderate demand as the government ramps up supply to alleviate the tight housing market. The supply of private housing on the Confirmed List has been raised to 4,100 units in H1 2023 from 3,400 units in H2 2022. On the public housing front, over 23,000 flats were launched in 2022 and up to 23,000 flats are expected to be launched in 2023. The government said that it is prepared to launch up to 100,000 new flats by 2025, maintaining a steady pipeline to cater to the demand.

This revision in ABSD does not come as a surprise considering how the market, has been and still is, facing a shortage in supply ever since the last enbloc fever in 2017–18. The upward push in residential prices stem from a demand-supply issue as mentioned in my previous articles. Given that the supply of houses is inelastic (since we cannot introduce supply overnight), a slight increase in quantity demanded would result in a more than proportionate increase in price.

Hence, it is necessary for the government to act out a two-pronged approach — increasing both supply and curb demand, to maintain a healthy and sustainable growth in property prices.

How Will This Revision Impact the Mass Market in the Short — Medium Run?

The demand and hence prices will be felt most acutely in the Core Central Region (CCR) while genuine homebuying and upgrading demand will likely benefit from a more gradual price trajectory moving forward.

Developers were spared any increase in ABSD rates this round but I forsee land bidding strategies to change slightly. For starters, they would be more prudent in selecting sites within the prime districts (9, 10 and 11), where primary sales typically target a higher percentage of foreign buyers who bears the brunt of this revision in ABSD. Developers may also prefer mass-market and 99-year leasehold sites over prime and freehold locations.

Sources: URA, Orange Tee & Tie Research & Analytics

In 2022, only 12.1% of private properties in the CCR were bought by foreigners, compared with 4.4% in the RCR and 1.7% in the OCR. Based on this, the ABSD hikes will affect only about 10% of all private residential property transactions — involving foreign investors as well as those buying their second and subsequent property.

Most UHNWIs who come to Singapore to set up a family office and be based here would eventually become a PR or Singapore citizen after having demonstrated their commitment to contribute to Singapore’s economy. If we think about it, the Government aims to discourage speculative buying, especially those who buy several units to either park their money here or flip properties. We still welcome foreign investments, but we want to avoid the housing market from being overheated as a result of such capital flow. The Government’s stance to prioritise housing supply for Singaporeans and stabilise property prices is very clear.

Pressure on Residential Rent Expected to Ease in 2023

After rents rose sharply from 2021 on an exceptional supply-demand imbalance due to delays in the completion of housing projects, rental pressure in both private and public housing markets is expected to ease this year.

In 2021, private rental demand from Singaporeans and PRs increased by about 7,000 units, compared to the average annual increase of approximately 1,300 units in 2018 and 2019. Among foreigners, rental demand fell by about 4,200 units. Overall, HDB residential rents rose by 38% while private residential rents were up 43%.

With the easing of border restrictions in 2022, foreigner demand rebounded to an increase of 2,300 units, while for Singaporeans and PRs, the increase fell to about 700 units. Private property rent rose by 29.7% while HDB rents increased by 27.6% during this period.

Between 2020 and 2022, there was an average of 20,000 private and public residential units completed, 22% lower than before the pandemic — when 26,000 units were completed on an average annual basis between 2018 and 2019.

About 32,000 public and private residential units will be completed per year on average between 2023 and 2025. In the private residential market, 8,000 private residential units were completed in the last two quarters, double the average completions of about 2,000 units per quarter in 2021 and 2022. HDB is also on tract to complete another 20,000 flats in 2023 — close to triple the 7,000 flats completed in 2020, during the pandemic.

As significant housing supply comes on stream, Singaporeans and PRs are likely to vacate their rental units to take up occupation of their completed units. This will however, be supplemented by foreigners who will turn to the rental market instead of owning a unit themselves. Overall, the rental market its expected to moderate later this year, into next year.

Q1 2023 Real Estate Statistics

Private Residential Market At A Glance

Prices of private residential properties increased by 3.3% in Q1 2023, compared with the 0.4% increase in the previous quarter.

Rentals of private residential properties increased by 7.2% in Q1 2023, a marginal moderation from the 7.4% increase in the previous quarter.

Launches and Take-up

No. of Private Housing Units Launched & Sold by Developers ( Excl. ECs)

A total of 1,312 uncompleted private residential units (excluding ECs) were launched for sale in Q1 2023, compared with the 504 units launched and sold in the previous quarter.

Supply in the Pipeline

Total Number of Unsold Private Residential Units in the Pipeline

Based on the expected completion dates by developers, 15,221 units (incl. ECs) will be completed in the remaining 3 quarters of 2023. Another 21,421 units (incl. ECs) are expected to be completed in 2024 and 2025. In total, around 40,400 units (incl. ECs) are expected to be completed between 2023 and 2025, which is around twice the 20,000 units completed from 2020 to 2022. This forms part of the total supply of about 100,000 public and private housing units to be completed between 2023 and 2025, which will help to cater to housing needs in the immediate few years ahead.


Over the past 2 years, the take-up rate for private residential units has been exceeding the supply which created a supply dearth in the market. Coupled with the delays in construction brought about by the pandemic, property prices have risen to a concerning high amidst sustained demand. In the coming years, the supply injection by the Government will see property prices grow at a steady rate albeit not immediately. This is certainly necessary to ensure that our future generation will still be able to afford both public and private housing.

There is no reason to panic over the revision in ABSD rates as the overall impact on the mass market will be minute to investors. ABSD has never been worth paying and more so now that rates have hiked. There are other ways of investing prudently without incurring ABSD, with decoupling being the most common method. For those who have the financial capabilities, I strongly encourage you to consider this option while it is still viable and while there is still runway for capital appreciation.

I hope this article serves purposeful in helping you make a more well-informed decision, regardless of whether you’re purchasing a property for own-stay or investment. As always, feel free to share your opinion in the comment section and I will take time to address them when I can. Till next time!



manfred lau

Real Estate Agent based in Singapore sharing bite-sized content while trying to keep it light. If you’re reading my stories, I hope you enjoy them!