PropNex, whose wishlist was covered in Issue 1222 of City & Country dated Jan 12, called on the government to reduce the ABSD rate for foreigners buying “ultra-luxury” homes in the Core Central Region (CCR), or non-landed private homes that cost at least $10 million each. At such a high quantum, the agency said these foreign buyers are not competing with Singaporean households.
ERA’s wishlist takes it a step further, calling for greater differentiation between “genuine homebuyers and investors”.
In April 2023, the government doubled the ABSD rate for foreigners purchasing residential property in Singapore from 30% to 60%. Similar to PropNex, ERA believes the move has been effective, with the average of 80 foreign-buyer transactions per month falling to just 25 per month.
See also: PropNex’s six property wishes for Budget 2026
“It is evident that the current 60% rate may be too harsh for most buyers,” reads ERA’s wishlist, released Jan 14.
While PropNex calls for the authorities to “restore the ABSD rate back to 30%”, ERA thinks the government should “gradually and carefully recalibrate ABSD rates for foreigners as price growth moderates towards more sustainable levels”. “The key is to strike a middle ground between the current 60% rate and the previous 30% rate, an approach ERA already proposed in last year’s Budget wishlist.”
In exchange for a lower ABSD, the government could introduce additional safeguards, such as a longer seller’s stamp duty holding period or restrictions on renting out the property, similar to the framework for Sentosa Cove landed homes, to discourage speculative activity.
ERA thinks homes in the exclusive area of the resort island should enjoy lower ABSD for foreign buyers. “A targeted reduction, or even removal of ABSD for Sentosa properties, could be considered without materially affecting the wider residential market. Foreign purchases in this enclave are unlikely to push up mass-market or even core central region prices, given the highly specialised nature of demand. Instead, such a move could help revive activity in a structurally subdued niche segment, without undermining broader affordability objectives.”
No ABSD for upgraders, downgraders
For a Singaporean family that “genuinely” wants to upgrade from their HDB flat to a $2 million private residential property (and own just one private residential property), the current ABSD regime requires them to either first sell their HDB flat or pay $400,000 in ABSD. “This stifles the aspirations of Singaporean households seeking to own private property,” says ERA.
Thus, ERA proposes that these Singaporean “upgraders” be allowed to defer ABSD if they sell their HDB flat within six to nine months of taking possession of the private property. “This grace period would allow time for renovation work and relocation.”
This suggestion is similar to the situation of HDB flat owners who move to another HDB flat or upgrade to a new EC, notes ERA. “This allows them to remain in their current homes without having to rent in the meantime.”
Similarly, Singaporean households that own one private property and are “right-sizing” to an HDB resale flat should be allowed to purchase the HDB first, with a six- to nine-month window to sell their private property”, says ERA. “This would allow time for renovations and a smoother transition.”
Such an arrangement would “reduce friction for genuine owner-occupiers”, adds ERA, “particularly older households or families looking to downsize, while preserving the integrity of the ABSD framework”.
Lifting wait-out for downgraders
HDB resale prices stayed flat q-o-q in 4Q2025, marking the first time public housing resale prices have remained unchanged since 1Q2020, according to HBD’s flash estimates on Jan 2.
ERA says it is “timely” for HDB to reduce or lift the 15-month wait-out period, a measure introduced in September 2022 that requires those who have sold their private residential property to wait for 15 months before they can buy an unsubsidised resale HDB flat (with exceptions for certain seniors).
Minister for National Development Chee Hong Tat has hinted that this condition could be removed before 2027, notes ERA.
Ensuring EC affordability
ERA is aligned with PropNex on a number of recommendations, though ERA’s wishes are generally more conservative.
For example, Propnex hopes the government can change the mortgage servicing ratio (MSR) from 30% back to 40%. The percentage refers to the portion of a borrower’s gross monthly income that goes towards repaying all property loans. The recommendation will undo a 2013 change to housing loans granted to HDB flat and new EC buyers.
PropNex also hopes policymakers can raise the household income ceiling of $16,000 per month for EC buyers to $18,000.
The current ceiling means EC buyers can borrow up to approximately $1 million from banks, though ERA notes that new EC prices have ranged from $1.3 million to $1.8 million. “Most new EC buyers must come up with significant cash to fund their purchase.”
But adjusting both the MSR and the income ceiling could broaden the pool of eligible buyers and increase demand for ECs, “which is already high despite higher prices”, says ERA.
Instead of PropNex’s two proposed changes, ERA suggests just one: a “modest increase” in the household income ceiling for EC buyers while leaving the MSR rate unchanged at 30%. “This ensures ECs remain an affordable pathway for middle-income households to improve their living standards.”
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