Analysts expect cooling measures to be reviewed as property market shows signs of stabilising

Singapore Property Market Update - 2025/2026 Outlook

Key Concepts:

• BTO (Build-To-Order): Public housing flats offered by the Housing & Development Board (HDB) in Singapore, built based on demand.
• ABSD (Additional Buyer’s Stamp Duty): A tax imposed on property purchases, particularly for foreign buyers and those owning multiple properties.
• Seller’s Stamp Duty (SSD): A tax imposed on the sale of property within a specified holding period.
• HDB Resale Flats: Existing public housing flats sold on the open market.
• Private Property: Housing not owned or managed by the HDB, including condominiums and landed properties.
• Right-Sizing: The trend of homeowners downsizing from larger properties (e.g., bungalows) to smaller ones (e.g., condominiums).

I. HDB Resale Market – Stabilisation and Potential Policy Review

The HDB resale market showed signs of stabilisation in Q4 2025, with resale prices increasing by only 2.9% for the full year – the smallest increase since 2019. Prices remained flat in Q4 2025, the first time this has occurred since 2020. Transaction volumes in Q4 2025 fell by nearly 20% year-on-year.

The increased supply of BTO flats (over 100,000 units launched from 2021-2025, including bed spaces) is providing more options for potential resale buyers. Approximately 5,000 more BTO flats will be launched in Bukit Merah in February, with projects near transport hubs and amenities expected to be popular. The success of BTO flats is cited as a “proven formula”.

With 13,500 BTO units reaching their Minimum Occupation Period (MOP) this year, market observers believe it is a timely opportunity to review current property cooling measures, specifically the restrictions preventing private property owners from purchasing HDB resale flats without first selling their existing property (a 15-month waiting period). Experts argue this policy is impractical for those seeking to downsize.

II. Private Property Market – Moderating Growth & Potential Cooling Measures

The private property market experienced a 0.6% price increase in Q4 2025, bringing the full-year increase to 3.3%, a softening from the 3.9% growth in 2024.

Desmond Sim, Group CEO of Reliance Group, anticipates further cooling in 2026 due to increased project launches and potentially lower interest rates. He notes that the effectiveness of existing cooling measures (specifically the 60% ABSD) is being assessed. The government is currently in a “reviewing phase” but not necessarily an “acting phase,” needing time to observe the impact of current measures.

The 60% ABSD has effectively reduced foreign investor activity in the market. Demand is now primarily driven by local buyers, including those right-sizing.

III. Landed Property Sector – Continued Price Increases

The landed property sector continues to see price increases due to limited supply. Land sales by the government are infrequent, making landed properties highly desirable. This sector benefits from capital unlocked from HDB upgrades and luxury condominium purchases, creating a progression for homeowners. Price increases in the landed property sector are exceeding those seen in the non-landed segment.

IV. Retail Market – Resilience and Rising Rents

The retail market has demonstrated resilience post-COVID, with retail space prices increasing by 3% overall in 2025, exceeding the 2% increase in rental prices. Singapore’s retail market is more resilient than those in Hong Kong and China, attributed to good management and government support.

Increased rental prices have attracted capital to the retail sector, with key local retail assets being checked over the past 12 months. While rental growth is expected to continue, it is not as pronounced as price increases (1.9% growth).

Desmond Sim cautions that high rents could lead to businesses exiting the market if they cannot sustain costs. He emphasizes the need for education for entrepreneurs regarding the full costs of operating a retail business, beyond just rent. Singapore’s retail spaces are generally smaller than those in cities like London, allowing for quicker reassessment of business viability.

V. Key Arguments & Perspectives

• Policy Review: Desmond Sim argues that the current restrictions on private property owners purchasing HDB resale flats should be reviewed due to practicality concerns for those seeking to downsize.
• Cooling Measures Effectiveness: The effectiveness of the 60% ABSD is being monitored, with the government taking a cautious approach to further intervention.
• Right-Sizing Trend: The trend of homeowners right-sizing, particularly older individuals selling larger properties to move into condominiums, is contributing to demand in the private property market.
• Retail Market Resilience: Singapore’s retail market is demonstrating resilience compared to other Asian markets due to strong management and government support.

VI. Notable Quotes

• Desmond Sim: “The million dollar question whether they’ll be using a farm [further cooling measures].”
• Desmond Sim: “It’s time to review [the policy preventing private property owners from buying HDB resale flats] because 80% one off practicality.”
• Desmond Sim: “The introduction of the 60% ABSD that has basically locked up some for investors.”

VII. Data & Statistics

• HDB resale price increase in 2025: 2.9% (smallest since 2019)
• HDB resale price change in Q4 2025: Flat
• HDB resale transaction volume decrease in Q4 2025: Nearly 20% year-on-year
• Private property price increase in 2025: 3.3%
• Private property price increase in Q4 2025: 0.6%
• Retail space price increase in 2025: 3%
• Retail rental price increase in 2025: 2%
• Expected BTO launches in Bukit Merah (February): ~5,000 units
• BTO units reaching MOP this year: 13,500
• Expected maturity of Private to be around: 15,000 units

Conclusion:

The Singapore property market is showing signs of moderation, with HDB resale prices stabilising and private property growth slowing. Increased BTO supply and the effectiveness of existing cooling measures are key factors influencing the market. A review of current policies, particularly those affecting private property owners seeking to downsize to HDB flats, is anticipated. The retail market remains resilient, but high rents pose a potential challenge for businesses. Overall, the market is entering a phase of observation and cautious adjustment, with potential for further cooling in 2026.