How did home prices keep climbing even after Singapore’s stiffest cooling measures in years? The answer lies in who is buying, what they are buying, and how scarce those homes are.
After April 2023, the Additional Buyer’s Stamp Duty was pushed to 60% for foreign buyers and 65% for entities, while citizens still paid 0% on a first home, 20% on a second, and 30% on a third or more. Permanent Residents faced 5%, 30%, and 35% respectively. That policy mix clearly signaled that owner-occupation and stability outranked speculation. Looking ahead to 2025, ABSD rates are expected to remain elevated, keeping foreign buying subdued and the market more reliant on locals.
ABSD hikes tilt the field: owner-occupation prioritized, speculative heat deliberately sidelined.
Consider one buyer whose costly miscalculation now feels familiar. Expecting prices to dip amid harsher duties, he delayed a purchase in the Core Central Region. Yet foreign demand, once a key driver there, did not trigger a price slide when it retreated; it merely thinned volumes. Amid these shifts, first-home exemption for Singapore citizens continued to anchor owner-occupier demand.
Foreigners’ share of non-landed resale transactions fell from 5% in January 2023 to 1.1% by October, and Indonesian citizens were not spared the 60% ABSD. Sales in the prime non-landed segment fell 27.1% in H2 2024, but a significant price correction failed to materialize.
Why? Supply stayed tight, and local buyers stepped in. Citizens and PRs dominated transactions, focusing on smaller units and homes in the Rest of Central Region and Outside Central Region.
With many HDB upgraders and cash-rich households targeting the $1.8 million to $4 million bracket, demand redistributed rather than disappeared. By H1 2025, the median unit price in the RCR even surpassed the CCR by 6.2%, a quirky twist that surprised more than a few observers.
This buyer also underestimated how developers and investors would adapt. Entities, deterred by the 65% ABSD, stayed on the sidelines, while developers pivoted toward more affordable, owner-occupier friendly projects outside the luxury core. Integrated developments like The Reserve Residences, with their unparalleled connectivity to retail, transport, and amenities, continued to attract significant interest despite market cooling measures.
Investors who remained in the high-end segment focused on rare, wealth-preserving assets, accepting lower liquidity and, yes, heavy stamp duties.
In the end, the market did not fall to meet his expectations. With unsold inventory low, private residential prices are still forecast to rise 3% to 4% in 2025.
Buyers now plan financing around ABSD formulas, stagger purchases, or reprioritize neighborhoods. The lesson is plain enough: policies can cool speculative demand, but when supply is tight and locals are well-capitalized, prices can still drift up, quietly and persistently.
