Introduction
You’re probably reading this because you’re planning to buy a property, either as an upgrade to your current property or as a 2nd investment property.
But like many others, you’re worried that new cooling measures could derail your plans.
From our conversations with clients and readers, three big questions keep coming up:
- How likely is it that new cooling measures will be introduced in 2025?
- What kind of measures might be rolled out, and how will they impact you?
- Should you buy before or after the next round of cooling measures?
And that’s the core intent of this article, the goal is to adequately address each of these issues in the sections that follow.
We are Decoupling Expertise
Quick introduction, before you decide to commit the next 5mins reading this article.
We are decoupling expertise, a team of specialist realtors that specialise in helping Singapore property owners derive the best strategy to purchase their second investment property without ABSD.
While decoupling property is often the go-to strategy that property owners adopt. We pride ourselves for helping our client explore and evaluate other alternatives that best suit individual circumstances and objectives.
Drop us a text to explore the best strategy to minimise ABSD on your next property purchase.
A Quick Look at Past Cooling Measures
To assess the probability of the government implementing cooling measures in 2025. It helps to look back at what triggered past ones and what was implemented.
Here’s a quick walkthrough of the cooling measure that have taken place over the last 15 years
| Period | Key Measures Introduced | Purpose / Trigger |
| 2009–2010 | – SSD (Seller Stamp Duty) introduced- LTV cut from 90% → 80% | Stop speculative buying post-great financial crisis rebound |
| 2011 | – ABSD introduced (targeted PRs, foreigners, 3rd home SCs) | Foreign capital inflow and rising prices |
| 2012–2013 | – ABSD raised- LTV limits further tightened- TDSR (Total Debt Servicing Ratio) introduced (Jun 2013)- MSR (Mortgage Servicing Ratio) introduced | Rapid price growth, high leverage, 2nd/3rd property surge |
| 2017 | – SSD holding period shortened- ACD (Additional Conveyance Duties) introduced | Prevent tax avoidance via corporate entities |
| 2018 | – ABSD raised across board (2nd property SCs +5%)- LTV lowered 5% across the board | En bloc fever & high land bids → future price inflation risk |
| 2021 | – ABSD raised again- TDSR tightened to 55%- HDB LTV reduced from 90% → 85% | Post-COVID demand surge, record million-dollar HDB deals |
| 2022 | – 15-month wait-out period for private owners buying HDB- Interest rate floor set for loan eligibility (4%)- HDB LTV cut to 80% | Soaring resale flat prices driven by private downgraders |
| 2023 | – ABSD for foreigners doubled (30% → 60%)- Trust ABSD: 65%- Higher BSD for >$1.5M properties | Surge in foreign demand, strong Q1 sales rebound |
| 2024 | – HDB loan LTV lowered from 80% → 75% | Continued HDB resale price escalation; 1,035 $1M+ flats sold |
What HIstorically Triggered Cooling Measure?
Looking at past patterns, the government usually steps in when one or more of these issues arise:
Rapid property price escalation and heightened speculative activity
This is normally initiated by news reporting of private condo and HDB selling for record prices and buyers rushing in for purchases with speculative intent.
This is further amplified by negative sentiments of average citizens complaining of income inequality and inability to afford housing for the purpose of family formation
Rising household debt and over-leveraging
Statistically an increase in average debt over income is another indicator that triggers government attention.
Excessive borrowing to chase rising prices introduces systemic risk to the economy. Unsustainable price growth, especially when not backed by fundamentals, leads to heightened risk of a property bubble.
Excessive foreign or investor demand crowding out genuine homebuyers
When too much demand comes from investors or foreign buyers, it squeezes out locals who are trying to buy a home to live in.
This creates a perception of unfairness and can lead to resentment, especially when locals feel priced out of their own country’s property market.
What Is the Government Really Trying to Achieve?
At the core, every cooling measure comes back to four main objectives:
1. Protecting Genuine Home Buyers
Prevent price escalations that make home unaffordable for genuine buyers, especially first-timers and young families. Without a home, citizen will delay marriage, and slow down family formation, causing a slew of other social issues
2. Managing Economic Risk
An overheated property market can threaten the broader economy. High household debt and inflated prices increase the chance of a correction — or worse, a systemic shock.
3. Ensure Social Harmony and Long Term Wealth Creation for Citizens
Property is the largest store of wealth for most Singaporean families.Keeping property values relatively stable (without sharp rises or crashes) protects long-term wealth preservation and social harmony. Singaporeans currently believe in the following equation – Work Hard = more money to buy property, property price goes up = more wealth. If this equation reverses, the motivation to work will be impacted.
4. Manage Social Equity and Sentiment
Rising property prices can widen the wealth gap and create resentment if it appears that the wealthy or foreigners are driving up prices.
Cooling measures help preserve social trust by showing that the government is acting in the public’s interest to ensure fairness.
What Could Trigger New Cooling Measures in 2025?
Now that we know what have historically triggered cooling measures. Let’s look into what has been happening between 2024 and 2025 that might raise red flags.
Record-High New Launch Prices
- Chuan Park Residences launched in Nov 2024 with a median price of S$2,587 psf, and 76% of its 724 units were snapped up on launch weekend.
- The Orie, sold put 86% of its 777 units at record RCR prices of S$2,704 psf.
Surge in Million-Dollar HDB Resales
- In 2024, over 1,000 resale HDB flats crossed the S$1 million mark, up from just 469 in 2023.
- 23 flats even breached S$1.5 million, blurring the line between public and private housing.
Continued Private Property Price Growth
- In Q4 2024, private home prices rose 2.3% QoQ, ending the year with 3.9% growth overall.
- The Rest of Central Region (RCR) led the pack, up 5.8% YoY, driven by new launches
What Types of Cooling Measures Might the Government Introduce?
With the expectation of cooling measures in sight, let’s prepare for the worst by looking into the type of cooling measures that could be implemented.
ABSD for First-Time Singaporean Citizen Buyers – Low Probability
Introducing Additional Buyer’s Stamp Duty (ABSD) for first-time buyers is extremely unlikely, primarily because it would be politically unpopular.
First-time homeowners represent a core group that the government has historically sought to protect. Imposing additional costs on them would be seen as a step backwards in making housing accessible to Singaporeans, especially for young couples and new families.
Moreover, taxing first-time buyers may do little to address the current property price escalation. The current property price hike is largely driven by HDB upgraders that have sold their HDB at a high price, enjoying significant capital gain. These segments of buyers are flushed with cash and may still continue on their upgrading plans even if a new ABSD were to be imposed on first time buyers.
What could happen is a further upward spiralling in prices as these buyers who purchased their property with an additional ABSD component, priced it as a premium into their asking price when they are selling their property.
Penalising those entering the market for the first time may not be the best solution.
Worse, such a policy could end up hurting the very group that needs the most support. Due to all these reasons, this move remains highly improbable.
Most Probable – Tightening of TDSR, MSR, or LTV
Leverage tightening measures will be the most probable tool that the government will turn to, if there is another round of cooling measures.
Tightening Total Debt Servicing Ratio (TDSR), Mortgage Servicing Ratio (MSR) and Loan-to-Value (LTV) limits. These levers directly reduce how much buyers can borrow, effectively limiting affordability and reducing buyers ability to bid up prices.
This allows the government to rein in the pace of price escalation without drastically destabilising the property market.
Moderate Probability – Higher ABSD for Second Property Buyers
An increase in ABSD for second property buyers remains a possible move, but its effectiveness is far more limited today. If it happens, it’s more tilted towards communicating the government posture against property speculation.
Over the several rounds of ABSD implementation. Buyers have increasingly turned to alternatives like decoupling and buying property under individual names to minimise ABSD.
More importantly, the current surge in prices isn’t primarily driven by investors purchasing second homes. Instead, it’s being led by HDB upgraders and owner-occupiers.
What Is the Potential Impact If Cooling Measures Are Implemented?
If new cooling measures are introduced in 2025, their impact will vary depending on which levers the government pulls.
Here’s a breakdown of the consequential impact of each type of cooling measures on property market:
ABSD on First-Time Buyers
If ABSD is imposed on first-time buyers. The impact on the property market will be as follows.
Temporary pullback in demand. First-time homeowners are typically more cost-sensitive, the introduction of new cost elements would force many to holdback on their purchase plans.
This could trigger a short-term dip in transaction volumes and possibly prices.
Buying sentiment and demand will return some time after buyers become accustomed to the new cost requirement.
Similarly, historical cooling measures are being assimilated some time after its initial introduction.
Loan Curbs
If the government tightens loan rules by adjusting TDSR, MSR, or LTV limits, affordability will decline across the board.
Buyers will no longer qualify for the larger loan size they can previously undertake. This will directly influence how much they’re able to pay for a home.
The impact will be felt most strongly in the upper-tier segments of the property market, particularly in CCR projects, premium and larger units within a condo development. This is where price points are higher and financing is more challenging.
As a result, demand is likely to shift downward to more affordable units, particularly those positioned for affordability, where entry remains within reach despite tighter borrowing limits.
Consider the case of a buyer considering a 3 bedroom premium unit in a newly TOP development before cooling measure. Potentially due to the reduced affordability after cooling measure, they buyer may consider more affordable option such as a three bedroom compact in a older resale development
Higher ABSD for Second Property Buyers
If ABSD rates are raised again for second-property buyers, the market response is likely to be muted.
Many investors have already adapted to ABSD by adopting alternative means to purchase their 2nd property. From our experience we don’t expect significant downside in demand or property prices.
How Will Cooling Measures Affect Upgraders and First-Time Buyers?
Experience reduced affordability
If cooling measures come in the form of tighter loan restrictions, both upgraders and first-time buyers will feel the squeeze. For upgraders, it will mean that the eligible loan that you qualify for will be lower and a greater proportion of the financing has to be made in cash and CPF.
But Entrenched Demand Will Still Persist
Despite reduced affordability, entrenched demand will stay strong. Parents who need to live within 1km of a primary school, families looking to upgrade to a larger unit, and buyers that are generally buying for genuine homestay reasons will still be entering the market.
Downshifting in Preference to More Affordable Properties
What changes is their target product: more will gravitate toward compact 3-bedders or 2-bedroom-plus-study layouts, resale units over new launches, and older developments compared to newly TOP developments.
What Does It Mean for Investors Looking to Buy a Second Property?
If you are investors looking at purchasing a second property, you will always be a loggerhead with government policies. Historically, cooling measures have never been kind to investors. To protect ourselves we need to buy towards a scenario whereby you can still profit healthily from a worst case outcome.
Case in point, you must own something that can still make money if cooling measures where to be implemented.
Positioning Your Second Property Towards Necessity and Affordability
The safest investments are units that are primed for home stay buyer demand. Prioritise the purchase of a unit that is positioned to capture non discretionary buyers demand. Aim for the confluence of attributes such as 1km to reputable primary school, optimal layout for family, and priced for affordability.
Prepare to Hold Through Sentiment Dips
Expect a short-term drop in transaction volume after cooling measures. Buyers turn cautious, and the market typically takes a few months to adjust. But demand for well-located, affordable homes will recover. As an investor, be prepared to hold through these dips and formulate an active refinancing plan to enhance your cash flow position.
Should You Buy Before or After a Cooling Measure?
This is the question on every buyer’s mind — should you lock in a property now, or wait to see if cooling measures kick in?
The answer depends on your situation, but here’s a breakdown of the trade-offs.
Why You Might Want to Buy Before a Cooling Measure
Loan Eligibility Could Shrink
If the government tightens Loan-to-Value (LTV) or Total Debt Servicing Ratio (TDSR) limits, your loan quantum may drop. Buying before the implementation of the cooling measure could mean the ability to purchase a larger unit at a newer development with better attributes. .
Purchasing A Higher Quantum Unit
If you’re moving from a $1.2 million flat to a $2 million private home, any tightening in loan rules will affect your financing. Acting before cooling measure would make sense in this case.
Strong Unit Already Identified? Don’t Risk Losing It
If you’ve already found a unit with strong fundamentals i.e. near an MRT, within 1km of a top school, or well-positioned in the market, waiting introduces risk. You may lose the unit, the ideal floor stack, or end up competing with others if supply tightens later.
Why You Might Want to Wait Until After a Cooling Measure
Prices May Temporarily Ease
Historically, cooling measures dampen sentiment in the short term. Sellers often adjust expectations, and closing prices may soften, particularly in the resale segment. If you are comfortable with a reduced loan financing option after cooling measure and can finance your purchase with more cash, then there could be merit in purchasing after the cooling measure.
Developers May Offer Discounts
If a launch underperforms post-measure, developers may reprice unsold units or offer launch incentives to maintain sales momentum. Waiting could land you a better deal.
Less Buyer Competition
Cooling measures tend to slow down investor and upgrader enthusiasm. If you’re targeting a large development or fringe-area launch, post-measure periods often see less balloting competition, giving you more choice and flexibility.
Conclusion: Always Position for the Worst-Case Scenario
As an investor you should always aim to engineer a outcome that you will “still win even when you lose”.
No one can say with certainty whether cooling measures will be introduced in 2025. But your goal isn’t to predict the market. It is to make a sound decision that can withstand any shift.
The right strategy is to buy a unit that can still do well even if a cooling measure is introduced tomorrow. That means:
- Don’t overpay – purchase within reasonable valuation
- Position to capture non discretionary buyer demand – target families, parents.
- Be ready to hold through short-term uncertainty – constantly enhance cash flow positions
If your property can ride through policy shifts and still appeal to the next buyer or tenant, you’re in a strong position, no matter what 2025 brings.
