This is part two of the ABSD article series, which analyses the impact of ABSD adjustments on foreigners – the first part is here. 

Disclaimer: This article will examine skilled foreigners who are not classified as High Net-Worth Individuals (HNWIs) and are not covered by the benefits of the free trade agreements (FTAs) established with Singapore.

Attracting skilled foreign professionals has long been a strategic policy adopted by the Singapore government in response to demographic challenges, including a rapidly ageing population and low birth rates. However, with the current high ABSD environment for foreigners, this raises questions about whether the increased foreigner ABSD discourages foreigners from coming to Singapore to settle and contribute to the economy.

Demographic challenges faced in Singapore

Singapore has been experiencing a decline in birth rates. As of 2024, Singapore’s resident total fertility rate remains at a historic low of 0.97 births per woman since 2023, with an average decline rate of approximately 4.28% year on year. Even the culturally significant “Dragon Year” in 2024, which is traditionally associated with birth spikes, failed to boost Singapore’s fertility, reflecting shifting priorities and goals among young couples.

Chart 1: Birth rate in Singapore (2015-2024)

As highlighted in the Population White Paper 2013, Singapore’s total population is expected to reach between 6.5 and 6.9 million by 2030. However, growth rates for Singaporeans and Permanent Residents have been sluggish, with a compound annual growth rate (CAGR) of +0.7%. This contrasts with a higher growth rate for non-residents, at a CAGR of +1.5%.

The current population of Singapore is 6 million, with a total of 30,808 resident live births as of 2024. Assuming the birth rate remains constant, it will be very difficult to reach the target of 6.5 million by 2030 without either significantly increasing the local birth rate or attracting more foreign nationals. This shows that foreigners continue to play a vital role in supporting the overall population and helping to achieve a higher population goal.

As such, we observed the Singapore government implementing a two-pronged approach: encouraging locals to have children through incentives like the Baby Bonus Scheme, and attracting foreigners to Singapore to establish businesses, such as the Overseas Networks & Expertise Pass (ONE Pass) introduced in Jan 2023.

Chart 2: Population growth of Singapore (2013- 2024)

Attracting foreign skilled workers to migrate to Singapore, settle, and contribute to the economy has therefore been a key message echoed by the Singapore government, compelling Singapore to remain open to global talent to sustain its economic resilience and international standing. 

How does ABSD impact decision-making for foreigners who want to purchase property in Singapore

While the high ABSD rates do prevent speculative demand, they also impact foreigners who plan to purchase private property for long-term residence. The 60% ABSD rate on a first property for foreigners results in a significant cost difference compared to SPRs, who only pay 5%. Consequently, there is a financial disincentive for foreigners to establish their roots here through property ownership.

Table 1: Calculation of ABSD when purchasing first property

Therefore, the most practical way for foreigners to buy property for personal residence is to initially rent then apply for PR status to minimise the ABSD tax burden. However, this approach may not be sustainable in the long term.

Looking at the Rental Price Index (RPI), rents have surged since the end of COVID, likely due to the reopening of borders and an influx of new foreigners. The sustained high level indicates strong rental demand, with the index remaining consistently above 160 for OCR and RCR segments since its peak in 1H 2023.  

Chart 3: Rental Price Index Across Market Segments (1Q 2020 – 1Q 2025)

Moreover, rents are increasingly taking up a significant portion of monthly income, especially for foreigners holding Employment Passes and S-Passes. Based on average monthly rental data for a typical 2-bedroom private unit, foreigners on S-Passes will face rental costs that exceed their current qualifying salary of $3,150. For foreigners on an Employment Pass, the average rent for CCR units accounts for approximately 90% of their minimum monthly qualifying wage of $5,500, whereas renting units in the RCR and OCR will take up approximately 56% to 70% of their monthly income.

Such figures thus highlight the financial strain faced by middle-tier foreign professionals in securing affordable rents while waiting for their PR approvals. 

Chart 4: 5-Year Average Monthly Rent For a 2-Bedroom Private Non-Landed Property (2020-2025)

HDB rental rates to remain strong

Alternatives such as renting HDB flats, while an affordable option for foreigners, are likely to see more rental price increases as the number of MOP flats continues to tighten at an average rate of 18,2% decline per year, decreasing the number of flats entering the rental market. Considering possible competition from local renters and price-sensitive tenants amidst the current economic uncertainty, demand for HDB rentals might rise and persist, applying more upward pressure on rental prices. However, not all flats reaching their Minimum Occupation Period translate into rental stock; a significant proportion remains owner-occupied, which caps the HDB rental supply.

Chart 5: Number of HDB flats reaching the 5-Year MOP period

Amidst supply-side constraints, foreigners who opt for the rent-and-wait approach will face higher costs and might not prove to be a suitable long-term solution for owning a property in Singapore. This adds to the already lengthy and stringent process of obtaining a SPR, which involves multiple criteria and considerable uncertainty.

Is it time to rethink ABSD for Foreigners Who Intend to Stay Long Term

To better align housing policy with Singapore’s broader population and foreign talent objectives, adjustments can be considered to the current ABSD policy for foreigners while maintaining its deterrent effect on speculative demand.

One potential policy recommendation is a tiered ABSD remission scheme for foreigners who demonstrate genuine intent to reside long-term, rather than purchase for investment purposes. Conditions such as obtaining PR status and meeting minimum occupancy targets can be considered to further encourage foreigners for long-term stay.

Table 2: Example of a tiered ABSD Remission Scheme (up to 30%)

Conclusion

As Singapore navigates demographic shifts and global competition for foreign talent, its housing policy must also adapt accordingly. Looking beyond the use of ABSD as a deterrent, a targeted and effective ABSD policy for foreigners could remove key obstacles in Singapore’s population strategy.

On that note, in part 3 of our article series, we will expand this discussion by examining the Core Central Region (CCR). This market is the most vulnerable to foreign buyer trends and is therefore crucial to analyse what is needed to sustain long-term market resilience despite the high ABSD environment.

Disclaimer

This information is provided solely on a goodwill basis and does not relieve parties of their responsibility to verify the information from the relevant sources and/or seek appropriate advice from relevant professionals such as valuers, financial advisers, bankers and lawyers. For avoidance of doubt, ERA Realty Network and its salesperson accepts no responsibility for the accuracy, reliability and/or completeness of the information provided. Copyright in this publication is owned by ERA and this publication may not be reproduced or transmitted in any form or by any means, in whole or in part, without prior written approval.

ERA: Built on Trust, Not Just Transactions

Co-written By Egan Mah & Stanley Lim

It’s the classic narrative of Singapore’s housing landscape: dating, getting married, and then moving into a newly completed Build-to-Order (BTO) flat as newlyweds. However, this familiar route isn’t always accessible to everyone, whether by personal choice or due to circumstances beyond their control.

Thankfully, for those who are unable to enjoy shared ownership of a property with a spouse, there are still avenues to enter Singapore’s property market with a trusted someone – be they a live-in partner, close friend, or family member. This guide will explore the various housing options, eligibility criteria, and key considerations for co-owning a Singapore property even when legal marriage isn’t on the cards.

Why is property co-ownership outside of marriage a consideration for some Singaporeans?

There are numerous reasons why some Singaporeans might opt to co-own a residential property outside of marriage.

While some aspiring homeowners may choose to do so due to practical concerns, such as financial constraints or caregiving responsibilities towards a disabled and/or elderly family member, others may be motivated by personal circumstances. Moreover, not all aspiring homeowners fall within the conventional definitions of family or marital status; yet they too are also seeking pathways to co-ownership.

For instance, a widower who has found love again may choose not to remarry to avoid the hurdles of legal marriage. Accordingly, they might choose to co-own a property with their new partner, which would enable them to build a shared home, sans the bureaucracy and formalities.

From a purely financial perspective, there is also a compelling case for co-ownership outside of marriage, given the robustness of Singapore’s property market. Property has long been regarded as a reliable investment asset locally, owing to its history of consistent appreciation. Between 2021 and 2025 alone, HDB flats and private homes have experienced significant upward momentum, as evidenced by the sharp 41.3% (142.2 to 200.9) and 30.1% (162.2 to 211.1) increases in their respective price indices.

Chart 1: HDB resale price index (RPI) and private residential property price index (PPI) from 1Q 2021 to 1Q 2025

Source: URA, HDB, ERA Research and Market Intelligence

In this light, property co-ownership transcends merely fulfilling housing needs; it also represents a strategic decision for long-term financial security. This is especially relevant for those who may not have children of their own and/or lack familial support in later stages of life.

However, given the increasing proportion of singles in Singapore’s resident population, personal choice and/or a desire for freedom are likely the main factors influencing interest in alternative paths to homeownership, including co-ownership arrangements.

Chart 2:  Growth in single-person households as a proportion of total resident households (2000 – 2024)

Source: SingStat, ERA Research and Market Intelligence

These beliefs tie in with a greater preference for single living as well, especially among Singaporeans seeking flexibility and privacy. Based on official SingStat figures, the number of single-person resident households has risen by over 200% from 75,400 in 2020 to 236,200 in 2024. Likewise, the share of single-person resident households has also seen a notable increase, doubling from 8.2% in 2000 (75,400 of 915,100 households) to 16.1% in 2024 (236,200 of 1,463,400 households).

Therefore, given the increasing prevalence of singlehood among Singaporeans, it is reasonable to suggest that there may indeed be a growing need to reimagine local homeownership beyond the traditional couple-centric model.

The Singapore Government has taken steps in this direction, with the most recent change being the expansion of public housing options for singles. A key policy revision in the second half of 2024 now allows singles – or, for co-ownership purposes, groups of up to four singles – to purchase 2-room Flexi HDB flats in any housing estate, including prime locations.

However, different homeownership requirements and considerations will apply depending on whether one is considering co-owning an HDB flat, an executive condominium (EC), or private housing.

What are the laws, rules and considerations for co-owning different residential properties for joint-singles?

Buying an HDB flat will require all parties to be at least 35 years old.

While HDB offers numerous eligibility schemes to support various demographic groups in their housing journey, single buyers interested in co-owning a flat need only focus on one: the Joint Singles Scheme.

Introduced in 1990, the Joint Singles Scheme allows eligible Singaporean men and women at least 35 years old to jointly purchase an HDB flat or Executive Condominium (EC). However, those who are widowed or orphaned may qualify from the age of 21, but only for resale Prime flats, unclassified resale flats, and new Standard and Plus flats.

For the purposes of this piece, we consider joint single households to be living arrangements involving two to four unmarried individuals of any gender. Additionally, if you intend to apply under the Joint Singles Scheme, it is important to take note of the following requirements:

Table 1: Joint singles eligibility criteria for HDB and EC flat purchases

Source: HDB, ERA Research and Market Intelligence

*Unclassified resale flats refer to HDB homes sold before the October 2024 sales exercise that do not fall under either Standard, Plus, or Prime classification categories.

Private home ownership is less cumbersome.

Unlike HDB flats or Executive Condominiums, purchasing private property as co-owners is not subject to specific eligibility criteria. However, co-buyers must consider the manner of holding or, more simply, how ownership is legally shared. This is particularly important for inheritance, as the selected holding method determines how the property is passed on after a co-owner’s death.

What are the different manners of holding or ownership types, and how do they matter in inheritance planning?

So, there are two property ownership types in Singapore, namely holding the property in Joint Tenancy and Tenancy-in-common. For HDBs, applicants under the Joint Singles Scheme must be registered as co-owners (i.e. the owner-occupier structure is not allowed).

While joint tenancy is the default holding method for HDB flats, buyers can opt for tenancy-in-common. However, this may come with higher legal fees due to the higher complexity of arrangements and the potential for disagreements.

1. Joint Tenancy

Under a joint tenancy structure, there is an undivided interest in the property. All owners are regarded as owning the entire property collectively, with no separate or distinct shares. When one owner passes away, the rights of survivorship come into effect. This means that the surviving owner automatically inherits the rights to the full share of the property, irrespective of any existing will.

This is with the exception of when both parties pass away at the same time. In such cases, the order of death becomes legally significant. However, when it is impossible to determine (e.g., simultaneous death in an accident), Singapore law presumes that the younger person passes away later. Hence, the younger party will inherit the entire property before passing it on to their next of kin or will beneficiaries.

For example, Jamie and Ashley are both unmarried 35-year-old singles with no family, who decide to buy an HDB flat together under a joint tenancy arrangement. If Jamie passes away, Ashley will inherit full ownership of the flat.

Below, we have summarised the characteristics of both manners of holding:

Table 2: Summary of manner of holding of property

Source: ERA Research and Market Intelligence

2. Tenancy-in-Common

Under the tenancy-in-common structure, owners can agree on their respective ownership percentages, provided they total 100%. For instance, if one party pays for 70% of the property and the other covers 30%, they hold a 70-30% share. These shares are detailed in the title deed. Upon death, each owner’s share will pass to their respective estate rather than to the surviving owner.

If all owners pass away simultaneously, each owner’s share will be allocated to their respective beneficiaries under their wills or according to the Intestate Succession Act if no will exists. The assets will be divided in accordance with the act.

Table 3: Common beneficiaries under the Intestate Succession Act*

Source: Singapore Statutes online (sso.agc.gov.sg)
* The Intestate Succession Act does not apply to Muslims. The estate of a Muslim is governed by Muslim law. ** ‘Issue’ is a legal term referring to one’s direct descendants.

The Tenancy-in-Common ownership structure would be ideal for two parties who have their own estates to pass on the property to, such as divorcees or widows with children, coming together to jointly purchase a property.

For instance, Lewis and Jesse own 70% and 30% of a condominium unit, respectively. If Jesse were to pass away, his share (70%) would go to his estate according to his will, while Lewis would continue owning 30% of the property.

Beyond legalities, what else should you consider before co-owning a residential property?

For many, the legal, emotional, and financial advantages of co-owning a property outside of marriage are very real. Still, it is equally important to recognise the responsibilities and risks that come with it.

Firstly, just as in marriages, breakdowns in relationships between co-owners can make living together challenging. However, unlike most relationships, where it is possible to walk away from the other party, you will be tied to the shared property unless both parties reach a consensus on future ownership.

The same goes for scenarios where financial difficulty is a concern. If one party is unable to cover their share of costs (e.g., mortgage, maintenance fees), the financial pressure may unfairly fall on the rest.

Lastly, inheritance disputes could arise even if a manner of holding or inheritance has been specified. For instance, in an emotionally charged situation, family members of a deceased co-owner may still choose to contest a will despite its legal standing.

For these reasons and more, all parties involved should establish a shared understanding and make definitive arrangements on how ownership should be handled in good times and in bad, before proceeding with a purchase.

Beyond formalising the manner of holding, prudent buyers may also consider drafting a will to facilitate smooth and unambiguous future transfers, particularly when a joint tenancy is involved. Likewise, a consultation with legal and real estate professionals is recommended for more precise understanding and informed guidance. Because just as with the people you love, those you share a roof with deserve nothing less than care and clarity.

Disclaimer

This information is provided solely on a goodwill basis. It does not relieve parties of their responsibility to verify the information from the relevant sources and/or seek appropriate advice from relevant professionals such as valuers, financial advisers, bankers and lawyers. For the avoidance of doubt, ERA Realty Network and its salesperson accept no responsibility for the accuracy, reliability and/or completeness of the information provided. ERA owns the copyright in this publication, and this publication may not be reproduced or transmitted in any form or by any means, in whole or in part, without prior written approval.

The 2H 2025 Government Land Sales (GLS) program introduced 4,725 private residential units in the Confirmed List. This brings our total annual Confirmed List supply close to 10,000 units. A total of ten sites were placed on the Confirmed List, comprising five private residential sites, three Commercial and Residential sites, and two EC sites.

Collectively, the 2H 2025 GLS Confirmed List totals an estimated 4,725 private homes, which encompass 990 Executive Condominium (EC) units, while the Reserve List will yield an additional 2,460 residential units. Overall, the private home supply (on the Confirmed List) slated for 2H 2025 fell by 6.7% compared to 1H 2025.

“The continued release of private housing supply aims to moderate recent bullish land bids in selected locations that have seen overwhelming interest. The release of sites, such as Dunearn Road and Woodlands Drive 17 (EC) could ease competition for nearby sites and potentially moderate land bids.”

Chart 1: Residential GLS Sites (No. of Units)

Where are the promising sites?

The Dunearn Road site will be the second private residential development launched following the announcement of Bukit Timah Turf City’s redevelopment plans earlier this year. The private residential site is nestled among the first upcoming HDB flats in Bukit Timah, and we expect the future residents to benefit from ample amenities as the area undergoes transformation. Demand for this site will be interesting to watched based off the performance of the prior Dunearn Road site that will close in late June.

The other CCR site in Newton at Bukit Timah Road will also draw in developer’s interest due to its strong location adjacent to Newton MRT interchange. The location will draw in both owner occupiers and investment buyers, due to its unique central location located not only near offices and the CBD, but also family friendly amenities and a good nearby primary school in ACS Junior.

Among the sites unveiled in the 2H 2025 GLS slate, Dover Road stands out with the highest estimated residential yield of approximately 625 units, along with a commercial component of 3,000 sqm, which will introduce crucial amenities for residents. The site is suited likely for owner-occupiers and working families as its location offers better access to one-north MRT station and a cluster of well-regarded schools. These include Anglo Chinese Junior College and Fairfield Methodist School (Primary and Secondary).

Lastly, the two EC sites at Woodlands Drive 17 and Miltonia Close will also be on the radar for developers. There has been a large influx of EC supply in the North, and developers will have to balance and consider their strategy when it comes to choosing the right site for development.

Bukit Timah Road – 340 units

This site is located adjacent to Newton MRT, which is a key stop for commuters travelling to and from the North-South and Downtown lines.

This CCR site boasts a medium to large size of 340 units and could see demand from both owner occupiers and investment buyers, due to its proximity to the city centre, and for those working in the finance sector, which hold offices in the Newton/Buki Timah Road area.

The site will be within the 1km priority enrolment distance from Anglo Chinese School (Junior), which is a definite plus for owner-occupier families. Amenities located close by are dense, with immediate dining options at Newton food centre, and access to multiple shopping malls in Novena, and Orchard just one stop away respectively.

Developers may show a warm interest in this prime Bukit Timah Road site, given limited competition due to the scarcity of new private home supply in the immediate vicinity. However, interest in the site could be moderated by its prime CCR location, and larger project size, which could spell higher risk than the other sites on this Confirmed List.

Bedok Rise – 380 units

Bedok Rise, located just beside Tanah Merah MRT Station, is largely a private residential estate surrounded by condominiums and landed homes. It provides strong connectivity, being an interchange on the East-West Line and towards Changi Airport.

There is a shortage of new homes in Bedok, the last major launch was in January 2023, when Sceneca Residence made its debut. It has since sold 98.1% of its 268 units. Demand for homes in Bedok has been high, with the latest site at Bayshore Road setting a new record price psf for an OCR site when awarded for $1,420 psf ppr in March 2025.

The new mall at Sceneca Residence located across the street provides amenities while there are several schools in its vicinity, including Temasek Primary School, Bedok View Secondary School, Bedok South Secondary School and the Singapore University of Technology and Design (SUTD). There are also several commercial and industrial nodes such as Changi Business Park, Changi Airport and the future Changi East Urban District close by. Therefore, developers’ keen interest is expected for this site.

Woodlands Drive 17 (EC) – 560 units

Among the two EC sites announced in this round’s GLS programme, this Woodlands Drive 17 site stands out as the premier option for upgraders in the North region. The location and name of this site might ring a bell, as a nearby EC site along the same road was launched for tender in 1H 2025.

Traditionally, ECs are located in less-prime areas relative to private developments, making them a more budget-friendly option in exchange for further distances from key amenities. However, this site will be located a walk away from Woodlands South MRT station, which enhances its connectivity to other locations on the Thomson-East Coast Line. Residents can also enjoy dining options at Woodlands Health Campus just next door.

The popularity of this site will largely depend on the bids received for the closing of the earlier Woodlands Drive EC, which would take place in August. Developers could wait for the results of the bidding process to plan or adjust their bidding strategy respectively. Additionally, this is the 4^th EC site launched in the North region in the same year, which could further pace the demand. However, despite all this, we should definitely see a fairly competitive bidding process for this site, as EC sites generally offer lower risk for developers.

Dairy Farm Walk – 500 units

Located near Hillview MRT station, Dairy Farm has been transformed to become a new housing cluster. Amenities there include HillV2 and Dairy Farm Mall, with the Rail Mall being slightly further away.

Presently, there are eight private developments surrounding the MRT station. The last site, also along Dairy Farm Walk, was awarded in January 2025 for $1,020 psf ppr. It had drawn two bidders and when completed, it can yield up to 540 units. This would mean competition for buyers, with more than 1,000 units available.

It is unlikely for developers to be competing strongly for this site.

Dunearn Road – 370 units

The Dunearn Road is the second site to be announced in the vicinity, following the debut of a previous site in the 1H 2025 Confirmed List. The tender for the earlier site will close in late-June this year, and developers could take cue from the results in their bids for this plot.

Demand for this site will be fuelled mainly by the Turf City transformation. This could encourage older residents from nearby landed estates to consider this as a right-sizing opportunity. The site is also close to Sixth Avenue MRT station.

Dover Road – 625 units

Among the sites unveiled in the 2H 2025 GLS slate, Dover Road stands out with the highest estimated residential yield of approximately 625 units, along with a commercial component of 3,000 sqm. The site is also situated closely to the one-north innovation district, much like recent GLS sites, such as Media Circle (Parcels A and B).

However, Dover Road is more likely to appeal to aspiring owner-occupiers and working families as its location offers better access to one-north MRT station and a cluster of well-regarded schools. These include Anglo Chinese Junior College and Fairfield Methodist School (Primar and Secondary).

The site also carries historical value as it sits on the former Dover HDB estate which consisted of Blocks 30-39. This marks the maiden residential development on the plot since its demolition in 2018 – 2019.

Tanjong Rhu Road – 525 units

This is the first residential GLS plot to be released along Tanjong Rhu Road in nearly three decades since 1997, making it a rare opportunity for developers seeking to cater to sustained upgrader demand in the city-fringe locale.

Its attractiveness is further enhanced by its proximity to key infrastructure and amenities. These include Tanjong Rhu MRT station on the Thomson-East Coast Line, offering seamless access to the CBD, and the nearby Singapore Sports Hub, which is part of the Kallang Alive master plan that is transforming the precinct into a major sports and lifestyle destination.

Kallang Avenue – 450 units

The Kallang Avenue site is within a 10-minute walk to both Kallang and Bendemeer MRT Stations. Some units will have unblocked waterfront views, overlooking Kallang River. There will also be a small commercial section within the development, that will provide amenities for residents.

Located between Kallang Avenue and Boon Keng Road, this site would be a potential site for HDB upgraders. The newer HDB estates have yielded several million-dollar flat in the past few years.

Despite being located within an industrial estate, developers are likely to be keen on this site.

Lentor Central – 580 units

Lentor, being located within the established and centrally located Ang Mo Kio town, has ample amenities and strong connectivity. All seven sites that were previously launched have been sold. Hence, the Lentor Hills estate saw a fresh injection of seven GLS sites initially. Despite yielding close to 3,500 units in total, there was still steady demand across all the projects.

Most recently, Lentor Central Residences sold 93% of its 477 units at its launch. Till date, excluding the latest Lentor Gardens site that was awarded in April 2025, there are less than 100 units remaining.

We can expect developers to closely watch this site, as it has promised a strong demand from both HDB upgraders in nearby towns, and right-sizers from the surrounding landed estates, due to its convenient location and nearby MRT within walking distance.

Miltonia Close (EC) – 430 units

The second EC GLS site of this half, the Miltonia Close EC site will be located off Yishun Ave 1, adjacent to Lower Seletar Reservoir Park.

The location attributes of this site are less desirable compared to the other EC site at Woodlands Drive 17. The biggest difference would be transport connectivity, where residents of this future site would have to spend 15-20 minutes on a bus commute to the nearest MRT of Khatib – whereas the Woodlands Drive site is closer to the MRT station.

However, this site promises a few unique attributes, such as a greenery and waterfront view overlooking the reservoir and park connector, as well as its location away from the main road surrounded by other private developments.

There should be a strong demand for ECs in Yishun, as the most recent EC in the town, North Gaia sold out all of its units earlier in the year. With the HDB focusing development in Yishun, particularly the upcoming Chencharu precinct with shorter waiting time projects, this could introduce future demand for the project.

Disclaimer

This information is provided solely on a goodwill basis and does not relieve parties of their responsibility to verify the information from the relevant sources and/or seek appropriate advice from relevant professionals such as valuers, financial advisers, bankers and lawyers. For avoidance of doubt, ERA Realty Network and its salesperson accepts no responsibility for the accuracy, reliability and/or completeness of the information provided. Copyright in this publication is owned by ERA and this publication may not be reproduced or transmitted in any form or by any means, in whole or in part, without prior written approval. 

This is part one of an article series examining the Additional Buyer Stamp Duty (ABSD) on foreigners.

It has been slightly more than two years since April 2023 when the Additional Buyers Stamp Duty (ABSD) was increased across the board. While Singaporeans and Singapore Permanent Residents (SPR) experienced an increase of between 3% and 5% on their second and third property purchases, foreigners faced a much steeper 30% rise, elevating their ABSD rate on any property purchase to 60%.

Hence, with foreigners bearing the brunt of this ABSD adjustment, it calls into question whether the high ABSD rates in the current market environment should be reviewed in the long run.

Introduced in 2011, the ABSD was designed as a cooling measure to curb property speculation and ensure housing affordability amidst strong overseas buying interest in Singapore’s relatively small market. Since then, the ABSD has undergone a series of rate revisions, but its core objective has remained the same: to curb speculation and keep price inflation in check.

Table 1: Timeline of ABSD adjustments

How has the ABSD adjustment impacted demand in the residential market?

Singaporeans have consistently formed the majority of home buyers in the private non-landed residential market (excluding ECs). For instance, between 2Q 2021 and 1Q 2025, local demand from both Singaporeans and Permanent Residents constituted approximately 97% of home buyers island-wide. In contrast, foreigners purchasing Singapore homes accounted for only 3% of transactions over the same period.

Table 2: Share of buyers of non-landed private properties (excl. EC) from 2Q 2021 to 1Q 2025

Although foreign demand constitutes a minority, it has traditionally been concentrated in the Core Central Region (CCR) compared to the Rest of Central Region and Outside Central Region (OCR). This is driven by the CCR’s proximity to business hubs and the availability of luxury developments. In 1Q 2023, shortly before the ABSD hike was introduced, the proportion of foreign buyers ranged between 2.5% and 15% across various market segments. Subsequently, the share of foreign buyers declined across all market segments, with the Core Central Region (CCR) being the most affected. The foreign share in the CCR dropped from 15.8% in Q1 2023 to 8.4% in Q2 2023.

Chart 1: Foreign Demand in the Residential Market

Is foreign demand the leading cause of rising property prices?

Consequently, a vital question to consider is whether foreign demand significantly contributes to housing price appreciation. Firstly, we have observed that local demand represented the majority of demand across the CCR, OCR, and RCR, with foreigners making the smallest share of transactions.

While the April 2023 ABSD adjustment effectively curbs foreign demand, it may have a limited effect on reducing price increases in the overall housing market.

Chart 2: Property Price Index of non-landed private residential properties in CCR, RCR and OCR

Examining the property price index, property price performance for the CCR seems sluggish after April 2023, with a compound annual growth rate (CAGR) of 3.2%, the lowest among the three market segments. Two factors contribute to this. On the demand side, it is evident that the effect of the post-April ABSD adjustment has suppressed foreign demand.

Supply-side factors have also contributed to the slow growth of CCR property prices. As shown in Table 4, there is an overall decrease in new units launched following the ABSD adjustment, which limits the available stock in the CCR and slows down the momentum of price growth. This could also indicate that developers may be more cautious due to the high ABSD rates imposed on foreigners, who represent a significant buyer profile in the CCR.

Table 3: Number of new units launched in the CCR across 1Q 2021 to 4Q 2024

Meanwhile, the RCR and OCR segments have continued to show comparatively more substantial price growth post-ABSD adjustment, sustained by local demand. The continued increase in property prices for RCR and OCR thus demonstrates that local demand remains resilient despite the increased ABSD rates.

Conclusion: Should ABSD rates for foreigners be reviewed?

Local demand has been the primary driver of residential property price growth in Singapore. Despite the sharp increase in ABSD rates, overall prices have continued to rise, further demonstrating foreign buyers’ limited impact on prices.

As Singapore continues to position itself as a global business hub, this raises the question of whether it is time to reassess the ABSD rates on property purchases by foreigners in order to preserve the country’s long-term attractiveness. This reassessment should ideally take into account the diverse profiles and intentions of foreign buyers.

In other words, a more nuanced policy approach could be considered – one that distinguishes between speculative investment and genuine housing needs.

On that note, in our next article, we will analyse how the doubling of foreign ABSD rates has affected skilled foreign talent in Singapore and what it signifies for Singapore’s future concerning broader policy trade-offs.

Disclaimer

This information is provided solely on a goodwill basis and does not relieve parties of their responsibility to verify the information from the relevant sources and/or seek appropriate advice from relevant professionals such as valuers, financial advisers, bankers and lawyers. For avoidance of doubt, ERA Realty Network and its salesperson accepts no responsibility for the accuracy, reliability and/or completeness of the information provided. Copyright in this publication is owned by ERA and this publication may not be reproduced or transmitted in any form or by any means, in whole or in part, without prior written approval. 

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