Property Measures 2021 – The Necessary Evil

Whether we slept late on 15 December 2021 or we woke early on 16 December 2021, there is nothing that anyone can do to stop the tidal wave that crashed onto our shores.

Welcome to Property Measures 2021, which I call the Necessary Evil.

For months, the market has been racing upwards, with land bids as well as property prices hitting new highs. So, it came as no surprise that these new measures were rolled out. It was always a matter of ‘when’ not ‘if’.

For buyers & sellers who have made their move, I rejoice for them. For those who have not, before you start panicking, breathe, stay calm and call me.

Firstly, let’s dissect the measures. In a nutshell…

(1) Higher Additional Buyer’s Stamp Duty (ABSD) Rates
– This affects the 2nd Property Investors and Foreigners.

(2) Tightened Debt Servicing Ratio (TDSR) from 60% to 55%

– This reduces the maximum amount potential homebuyers can borrow for Private Properties purchases.

(3) Reduced Loan to Value (LTV) from 90% to 85%.

– This reduces the maximum amount potential homebuyers can borrow from HDB.

So what is likely to happen?

Just like the past measures, a higher ABSD will encourage investors to take a breather, while they observe how the market will respond. Speculators will expect the market to fall, which is unlikely to happen because the reality remains:

Market Supply & Demand

There is still a shortfall of completed supply of properties in the next 2-3 years for both HDB and Private sector. This is mainly due to the backlog of material and labour shortages, as well as record numbers of HDB MOP upgraders creating genuine demand.

(Chart on number of supply in the market and also, number of MOP upgraders)

Interest Rates

Interests rates is likely to remain low for some time to come (Even with the expected start of rising rates in 2H2022). For reference, during Global Financial Crisis period, it took 10 years for rates to return to 2%.

Foreign Investors

The huge movement in the market for the last 2 years are a result of local buyers (Singaporeans + PRs). Foreigners seeking safe-haven lands will still return to our shores after this past 2 years of Covid, especially as there are many countries who face equivalent or stiffer stamp duties.

Developers’ Mindset
There is a low supply of new launches in 2022 and 2023 years, and with the higher costs of buying land, they are likely to sit tight and not offer any discounts. They are likely to maintain or increase the price of their current new launch properties to maximize their profitability. In the worst case scenario, they may sell the properties at a lower profit margin but not to the extent to trigger a price war, like what they have done at the peak of COVID in 2020 and during the past market cycles.

Other Options

Moreover, compared to other asset classes and properties globally, Singapore properties are still considered relatively cheap. Once Local and Foreign investors have done their homework and wrapped their minds around it, many will come to terms with it. For instance, the US stock market (SPX) has gone up by 40% since pre-COVID, whilst property prices across the globe have sky rocketed with Singapore clocking one of the lowest gains (8%) in comparison. (Reference Chart)


With Every Adversity, There Are Opportunities

So, where will the property market move?

Larger Units

Larger units are expected to see higher demand as local and PR investors would rather buy a larger 2nd unit than face a higher ABSD for 3rd properties. We can expect more decoupling cases to occur.

Core Central Areas

Core central areas such as Orchard, City Center are places where buyers have deeper pockets and where foreigners are the most likely to buy; will see more action as these buyers are less sensitive to the changes.

EC & MOP HDB Owners

With a slowdown of prices outside of the Core Central Areas, EC and MOP HDB owners will have better choices for upgrading in 2022. This is because, the slower pace of price growth will give them room to upgrade without chasing escalating prices and being fearful of being priced out of the market.


Singaporeans and PRs will buying more properties under trust to maximize their dollars and minimize the tax payments.



With the increased cost for developers, developers will be more conservative in their land buys. En-bloc owners will realize this and be disappointed as they may not be able to achieve their desired price. For those who do not want to wait another cycle, they may reduce their expectations to move their property this round.


2nd and 3rd Property Investors will sulk for a bit, upset that they did not purchase quickly. However, they will then consolidate their funds by selling and buying a larger property, such as a landed, penthouse or dual key apartment. Dual key units should see an increase in demand.

Overall, these new measures are unlikely to trigger a correction in Property Prices. The intentions as stated by MND repeatedly, is ensure a sustainable property market which appreciates in line with income growth of citizens.

The Government’s active managing of the property market goes both ways – to cool and heat the market. For instance, in 2017, the government reduced Seller Stamp Duty (SSD) to 3 years from 4, helping to activate the market. Their aims are simply to make sure that volatility is kept to a minimum and the wealth preservation aspect through property investments can be retained through generations.

Like to find out more? Call The Property Runway today for your consultation.

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