Triple whammy of cooling measures, rising supply and higher rates can end up cycle in home prices

Private homes remain coveted assets, but cooling measures, rising supply and higher interest rates point to an imminent end to the ongoing run-up in prices.

Leslie Yee

Published Sat, Dec 18, 2021 · 05:50 AM

Singapore property

TRANSACTION costs have just gotten a lot higher for those who are thinking of using their year-end bonus to help fund the purchase of another private home here for investment.

New property cooling measures kicked in on Thursday (Dec 16) to temper the exuberance in the private home and Housing Development Board (HDB) resale markets. They include higher additional buyer's stamp duty (ABSD) rates - up by 5 to 15 percentage points - for all individuals and entities except Singapore citizens and permanent residents buying their first home. Total debt servicing ratio threshold and the loan-to-value limits for HDB loans were also tightened.

For instance, citizens buying their second home must now pay 17 per cent ABSD, up from 12 per cent previously, while foreigners buying any home are subject to a 30 per cent rate, up from 20 per cent.