Property Cooling Measures

Property cooling measures

If you’ve only got a minute:

  • The latest set of cooling measures from 30 September 2022 aims to moderate demand and ensure that resale flats remain affordable for buyers.
  • Private property owners will now have to wait for 15 months after selling their property before they can buy a non-subsidised HDB resale flat. The loan-to-value limit for HDB loans will be lowered from 85% to 80% to encourage more financial prudence when taking on loans.
  • Among the measures introduced are higher Additional Buyer’s Stamp Duty (ABSD) rates and a tightening of the Total Debt Servicing Ratio (TDSR) threshold.
  • Affordability is key when making big ticket purchases.

With the surge in property prices in Singapore over the last few years, the Singapore government implemented more measures to cool the residential property market since December 2021.

One of the primary drivers behind the increased demand for housing is the low-interest rate environment amid the Covid-19 pandemic. Despite the economic challenges, transaction volumes in both the private housing and HDB resale markets have shown an upward trend.

Making sense of the latest property cooling measures in Singapore

In response to the evolving situation, the government introduced another round of cooling measures on 30 September 2022. They were aimed to moderate housing demands of resale HDB flats and promote prudent borrowing in the face of rising interest rates.

These measures came less than a year after the December 2021 initiatives, which raised the Additional Buyer’s Stamp Duty (ABSD) rates, tightened Total Debt Servicing Ratio (TDSR) thresholds, and reduced Loan-To-Value (LTV) limits for loans.

According to the Monetary Authority of Singapore (MAS), price pressures in the private residential property market in Singapore have eased due to the cooling measures, increased interest rates, and weakness in economic growth. Property price growth has moderated over 2 consecutive quarters, dropping from 11.4% in Q1 2023 to 4.4% in Q3. Transaction activity has stabilised, returning to pre-Covid-19 levels, while foreign demand, which doubled in 2022, has dwindled following the introduction of cooling measures in April 2023.1

HDB Resale flat prices saw a 4.8% increase in 2023, marking a notable decline from the 10.4% surge in 2022, as reported by the Housing and Development Board (HDB). The resale volume of Q4 2023 is also the lowest compared to the last 3 years as more buyers may have been diverted from the resale market to the Build-to-Order (BTO) market as they were offered more housing options (with more than 12,000 new flats launched for sale) in Q4 2023.2

Making sense of the latest property cooling measures in Singapore

Here’s how they can impact you.

Additional Buyer’s Stamp Duty (ABSD)

ABSD is a tax that's levied on top of the Buyer's Stamp Duty (a tax that property buyers have to pay when they buy a property), and it's computed based on the valuation or the selling price of the property, whichever is higher.

Should you invest in SG property?

With the latest measures, ABSD rates for the purchase of a 1st residential property by Singapore citizens and permanent residents (PRs) remain unchanged at 0% and 5% respectively.

For these 2 groups, purchasing a 2nd or a 3rd and subsequent residential property will incur increased ABSD rates.

Singapore citizens will now pay an ABSD rate of 20% for their 2nd residential property, and 30% for their 3rd and subsequent residential property. This is up from the previous rates of 17% and 25% respectively.

The ABSD rates for permanent residents buying a 2nd or a 3rd and subsequent residential property has been increased to 30% and 35% respectively, up from the previous rates of 25% and 30%.

Foreigners and entities will also incur more ABSD when purchasing any residential property.

Foreigners buying any residential property are subject to an ABSD rate of 60%, up from 30%. Entities, which include companies, are subject to an ABSD rate of 65%, up from 35%.

There is no change to ABSD for housing developers. They will still be subjected to a 35% ABSD rate, of which they can apply for a remission plus an additional 5% ABSD (paid upfront upon property purchase) that cannot be remitted.

Total Debt Servicing Ratio (TDSR)

The TDSR is the portion of a borrower’s gross monthly income that goes towards repaying the monthly debt obligations, including the loan being applied for. With the latest cooling measures, the TDSR threshold has been tightened to 55% from 60% previously.

This means new mortgages cannot cause borrowers’ total monthly loan repayments to exceed 55% of monthly income.

It will apply to loans for the purchase of properties where the option to purchase (OTP) is granted on or after 16 Dec 2021. The same applies to mortgage equity withdrawal loan applications in the same period.

Increase in TDSR and Mortgage Servicing Ratio (MSR) calculation by 0.5 % point

The interest rate floor used to compute the TDSR and the MSR will be raised by 0.5% point. An interest rate floor of 3% for computing the eligible loan amount for those granted by HDB was also introduced.

Type of Home Loan

Interest rate floor

Actual loan rate

Bank Loan

4% (previously 3.5%)

Depends on bank

HDB Loan


2.6% (current)

Do note that the change affects the assumption in interest rate while the actual interest rates charged will continue to be determined by the private financial institutions.

Impact of new interest rate floor on monthly payment calculations

Loan Amount

At 3.5% (before)

At 4% (as of Sept 30 2022)


Monthly Payments

Monthly income ceiling before TDSR

Monthly Payments

Monthly income ceiling before TDSR

Difference in monthly income

$1 million






$2 million






Source: Straits Times

To borrow $1 million, home buyers will now need to be earning $8,680 to qualify for a home loan based on a 0.5 percentage point increase in the interest rate assumption.

Making sense of the latest property cooling measures in Singapore

Loan-to-value (LTV) limit for HDB Loans will be lowered from 85% to 80%

This reduces the maximum amount that home buyers can borrow from HDB.

This means the maximum loan amount is capped at 80% of the market value of the house.

For example, if a particular HDB flat is valued at $500,000, you can borrow up to $400,000. The lower LTV reduces the maximum amount potential homebuyers can borrow from HDB.

One of the key reasons for homeowners to choose a HDB loan over a bank loan is due to the higher LTV limit. It effectively means that home buyers can borrow more money if they need to. This also reduces the amount of downpayment required (previously just 10% before December 2021).

With the current LTV for HDB loan at 80%, it reduces the LTV gap between taking up a HDB loan and a bank loan to just 5%, which may reduce the incentive for one to take up a HDB loan if bank loan interest rates are competitive.

The revised limit will not apply to mortgage loans granted by banks, which will remain at 75%.

Private homeowners will need to wait for 15 months after the sale of their home before they can purchase a non-subsidised HDB resale flat

This 15-month wait-out period will be exempted for seniors aged 55 and above who are moving from their private property to a 4-room or smaller resale flat.

This is meant to be a temporary measure to curb demand for public housing and to ensure that resale flats remain affordable.

Such property owners were previously allowed to buy a HDB resale flat if they sell their private properties within six months of the purchase.

The wait-out period for private homeowners who are first-timers and wish to apply for the Central Provident Fund (CPF) Housing Grant and Enhanced CPF Housing Grant for their resale flat purchase remains unchanged at 30 months. The same applies for executive condo owners.

Financial planning is key

The combination of high property prices and an increasing interest rate environment does not bode well for property buyers. It is prudent to do proper due diligence as a property purchase is a big-ticket item and a long-term financial commitment.

Make use of DBS MyHome planning tool to work out your sums carefully and see if you’re able to commit to the mortgage payments over time before making your purchase.

For private home buyers who are looking to buy a HDB flat, you’d need to factor in the 15-month waiting period and factor in your living arrangements.

You may need to rent a place to stay temporarily, which will increase the cash outlay for your overall property transaction.

Assess your home purchase in relation to your financial plan and other investments. This will help to provide more clarity on your overall financial health and enable you to understand how your other goals may be impacted in the short and long term.

In the light of the latest cooling measures, you may wish to consider other instruments instead of relying heavily on property to grow your wealth.

Read more: Should you invest in SG property?

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Check out DBS MyHome to work out the sums and find a home that meets your budget and preferences. The best part – it cuts out the guesswork.

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Alternatively, prepare yourself with an In-Principle Approval (IPA), so you have certainty on how much you could borrow for your home, allowing you to know your budget accurately.

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Disclaimers and Important Notice
This article is meant for information only and should not be relied upon as financial advice. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.

1 Ovais Subhani, “Singapore private home prices moderate; rents may continue to decline.
MAS, The Straits Times. Retrieved 10 Jan 2024.
2 Lee Chong Ming, “HDB resale prices for 2023 rose 4.8%, less than half of 2022's increase.
Channel News Asia. Retrieved 10 Jan 2024.

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