The joint statement also announced that there will be an increase of the SSD rates by four percentage points for each tier of the holding period. The SSD rates will now be 16% for the first year of sale and steadily decrease by four percentage points per year before falling to 0% after four years.
These changes will take effect for all residential properties purchased on and after midnight on July 4. They will not affect HDB owners due to the minimum occupation period (MOP) for HDB flats.
UOB Global & Markets Research says there may still be concerns over the property market overheating despite moderating home prices in 1H2025 due to the sharp decline in domestic interest rates since the start of the year.
"We expect the tightening in the SSD measure to have some moderate adjustment to domestic property demand in the short run, but there will be mitigating factors such as the lower interest rates and relatively resilient economic growth and labour market against an expected increase in pipeline supply. We note that the Singapore property market remains on very sound fundamentals," UOB says.
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Following the announcement, the team at RHB Bank Singapore is remaining “overweight” on the property sector as it calls the latest move a “minor speed bump” to ensure the sector’s sustainable recovery.
“The move does not come as a surprise to us,” says the team in a note issued on July 4. The announcement also follows an increase higher sub-sale activity in recent years, prompting RHB to flag this as a potential “light-touch” measure to curb speculative purchases and enhance the robustness of the residential market.
“It has to be noted that prior to 2017, the SSD holding period was four years. It was then lowered to three years. With this move, the government is now reverting to the pre-2017 SSD holding period and rates,” RHB points out.
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Yet, the changes are likely to have a “muted” impact on the residential market as RHB believes that most of the buyers - 85% to 90% of them - are genuine home owners.
In addition, the increase in new home supply over the last two years, coupled with a volatile macro-economic condition, has lowered the allure of speculative purchases at recent new launches.
Overall, the RHB team maintains its new home sales estimate of 9,000 to 10,000 units for 2025. This includes executive condominium units.
That said, the team believes there may be a “minor knee-jerk reaction” on listed developers and real estate agencies such as City Developments Limited (CDL), UOL, APAC Realty and PropNex especially given the recent rally. However, these stocks are likely to recover over the course of the year.
RHB has a “neutral” call on City Developments Limited and a target price of $4.90, while it has a “buy” call on APAC Realty with a target price of 54 cents. It does not have coverage on UOL and PropNex.
Meanwhile, the team at DBS Group Research believes the latest measure will have an initial negative impact on property agencies more than property developers. This is given that the developers are focused on asset recycling and value unlocking as a bigger theme and driver to their revalued net asset values (RNAVs).
Looking back at historical data back in 2011, the SSD is also likely to help curb investment demand “somewhat”, although it has only been seen gradually over three to four years.
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“This is especially so for new property launches, where investors, lured by the ability to ‘exit’ within three years without taking on the mortgage obligations of a property loan as most new homes take around three years to complete, notes the DBS team.
The new rules are expected to offset a potential uptick in buying interest following the recent decline in mortgage rates to around 2.1% to 2.2% offered by banks.
“These investors could now rethink their buying decisions with a longer wait out period,” notes DBS. “Together with increased supply put out in the public housing space and in the government land sales (GLS), this will lead to a gradual cooling of the property market.”
DBS has “buy” calls on PropNex and APAC Realty with target prices of $1.25 and 50 cents respectively.
Separately, Bloomberg Intelligence (BI) says Hongkong Land's potential disposal of MCL Land could face increased challenges as a result of the measures to cool heightened demand tighten. This will also dampen investment demand for residential property, BI adds.
