What Are Cooling Measures

Cooling measures are regulations implemented by the Singapore government to curb excessive price growth in the property market. They help maintain housing affordability, promote financial prudence, and prevent overheating caused by speculation.

? Key Cooling Measures in Singapore (As of 2025)

1. Additional Buyer’s Stamp Duty (ABSD)

Buyer Type	ABSD Rate (2024–2025)
Singapore Citizen – 1st home	0%
Singapore Citizen – 2nd home	20%
Singapore Citizen – 3rd+ home	30%
PR – 1st home	5%
PR – 2nd+ home	30%
Foreigners (any property)	60%
Entities / Trusts	65%

? Purpose:
To reduce demand from multiple property owners and foreign buyers, and prioritize home ownership for locals.

2. Total Debt Servicing Ratio (TDSR)

Cap: 55% of gross monthly income
Includes: All existing debt obligations (credit cards, car loans, mortgages)

? Purpose:
Ensures buyers do not overextend themselves financially. It encourages prudent borrowing even in low interest rate environments.

3. Loan-to-Value (LTV) Limits

Loan Type	Maximum LTV
HDB Loan	80%
Bank Loan (1st)	75%
Bank Loan (2nd+)	45–55%

? Purpose:
To reduce leverage and make buyers put more upfront equity into their homes.

4. Seller’s Stamp Duty (SSD)

Applies if you sell a property within 3 years of purchase:

Holding Period	SSD Rate
Year 1	12% of sale price
Year 2	8%
Year 3	4%
After Year 3	0%

? Purpose:
To discourage house flipping and short-term speculation.

5. Mortgage Servicing Ratio (MSR)

Applies to HDB and Executive Condo (EC) purchases
Capped at 30% of gross monthly income

? Purpose:
Limits monthly loan payments to ensure buyers stay within means, particularly in public housing.

6. Tightened Stress Test for Loan Approval

MAS requires that banks apply higher interest rates (e.g. 4–5%) when calculating loan eligibility to ensure buyers can handle rate hikes.

? Purpose:
Prepares buyers for future interest rate increases.

? Recent Impacts of Cooling Measures (2023–2025)

Foreign investment dropped significantly after the 60% ABSD hike in April 2023.
Resale HDB market has stabilized with prices plateauing in late 2024.
Private property growth has slowed, especially in Core Central Region (CCR).
Upgraders are more cautious, focusing on value-for-money options in Outside Central Region (OCR).

? Who Is Most Affected?

Group	Impact Level	Details
First-time locals	Low	Encouraged to buy with minimal ABSD
Investors (locals)	High	Hit by ABSD + SSD + tighter loan limits
PRs foreigners	Very high	30–60% ABSD makes investment expensive
Upgraders	Moderate	Second home incurs ABSD; LTV reduced

? What Are Property Buyers Doing?

Delaying second property purchases to avoid ABSD
Exploring Executive Condos (ECs) to bypass some rules
Shifting interest to REITs or overseas property
Buying with family trusts or co-buying with spouses to optimize stamp duties (within limits)