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Is it the End of Singapore's Property Boom? Analysis on 2023's Cooling Measures - Impact and Causes

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On 26th April 2023, the Singapore government announced new cooling measures aimed at cooling down the country's red-hot property market. The Additional Buyer Stamp Duty(ABSD) rates has been raised yet again, following the previous hike that was announced on Dec 2021.


The ABSD is a tax imposed on buyers purchasing a residential property in Singapore. The rate of ABSD varies depending on factors such as the buyer's residency status and the number of properties they already own. The government's latest move increases the ABSD rates across the board.

Below are the revised ABSD rates:

*In summary, the only groups of buyers that are not affected are Singaporeans and PRs that are purchasing their first property.


Let us rewind back to the previous time the government raised the ABSD rate, which was in Dec 2021. Why did the rates increase back then? Well, if we refer to a report made by the Monetary Authority of Singapore(MAS) in Nov 2022, It stated that Singapore saw a record of $448 billion inflow of new money.

Quoting from the report, MAS Managing Director mentioned "When a large sum of money comes into any country, you should be worried about it,". Hence, the government raised the ABSD in response to this inflow of money, as a pre-emptive measure to prevent the property market from overheating.

Fast forwarding till today, we believe that there is a huge amount of funds that has made its way to Singapore that has not been reported publicly yet, and that the government is pre-emptively cushioning the impact on the real estate market with the ABSD hike.

We are also hearing reports of many ultra rich families from around the world that are coming into Singapore to set up family offices, as well as eyeing to get residency here to protect their wealth. One example of such group are the wealthy Taiwan families, who are looking to secure and protect their assets in Singapore amidst the China-Taiwan tensions rising.

With all these factors to consider, we wonder how many billions have already came into Singapore to warrant such a steep increase to the ABSD rate of Foreigners.


Let us fall back to some data, referring to the chart below, in 2022, Singaporeans and PRs made up of 95% of non-landed home sales. Even throughout the past few years, Singaporeans and PRs are averaging close to 95% of the overall demand in the market.

So while this cooling measure might dampen the demand from foreign investors, from the data above we can actually deduce that there is still a strong demand from our locals.

So let us address the biggest elephant in the room,


Well, referring to a report made shortly after the announcement of the cooling measure, our Minister for National Development Mr Desmond Lee said:

“If we don’t take early pre-emptive measures, we may see investment numbers both by locals and by foreigners grow, that will add stress to Singaporeans who are looking to buy residential property principally for owner occupation.”

From this statement, we can tell that the cooling measure is mainly to crimp down on investment demand from both the local and foreign buyers, in hopes to ease the rapid growth of property prices over the last few years.

Referring to another set of data shown below, just counting from Q4 2020 till Q1 2023, the prices on average has grown by ~20%, which solidifies the fact that prices have indeed been booming.

So to address the main question, we believe that what the government is aiming for is to slow down the price growth rate. Would this cause the prices to come down? It might, but only time will tell as no one is able to accurately predict the future.

If you are experiencing uncertainties in your purchasing due to the cooling measure, and is afriad that the prices might dive after you move forward with your property planning, rest assured, past statistics have shown that the prices for property is generally resillient and is highly unlikely to experience a huge crash in the market.

Still having doubts? Feel free to reach out to us and let us address and discuss any other concerns that you might be facing with regards to your real estate planning!


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