Broker: OCBC Investment Research
Date of Report: 4 July 2025

Singapore Property Sector Braces for Impact: New Seller’s Stamp Duty Measures and Market Outlook for 2025

Introduction: Fresh Property Cooling Measures Shake Up Singapore Market

Singapore’s real estate landscape has been jolted by a new set of property cooling measures, with the government implementing stricter Seller’s Stamp Duty (SSD) policies effective from 4 July 2025. These changes come amid heightened concerns about speculative activity and shifting market dynamics, despite a recent dip in borrowing costs and continued resilience in homebuyer sentiment.

Key Highlights of the New SSD Policy

The latest changes to the SSD policy are designed to address speculative sales in the private residential market:

• Extension of the SSD holding period: Increased from three years to four years for properties purchased on or after 4 July 2025.
• Higher SSD rates: Each tier of the SSD holding period sees a 4 percentage point increase.
• Targeted Sector: These measures apply to private residential properties only, as HDB flats remain unaffected due to the existing Minimum Occupation Period (MOP) of five years.

This policy reversal reinstates the stricter framework previously relaxed in 2017. The move follows a notable uptick in private property transactions with short holding periods, especially sub-sales of units not yet completed—viewed as strong indicators of speculative intent.

SSD Schedule and Rates: What Has Changed?

Sub-Sale Activity and Speculation: The Data Behind the Move

• Sub-sale transactions surged year-on-year since 1Q21, with annual increases of 186.9% in 2021, 34.7% in 2022, and 69.2% in 2023.
• Momentum slowed in 2024 (+10.4%), and sub-sale units as a percentage of the overall market rose from 2.0% in 4Q21 to 9.5% in 4Q23, before trending down to 4.4% in 1Q25.
• In 2Q25, sub-sale unit sales fell 49% year-on-year to 198 units, comprising 4.5% of total transaction volumes.

The government’s measures appear pre-emptive, aiming to curtail renewed speculative activity amid falling Singapore Overnight Rate Average (SORA).

Private Residential Property Price Trends and Sales Volumes

• The URA Private Residential Property Price Index (PPI) rose 0.5% quarter-on-quarter in 2Q25, following 0.8% and 2.3% increases in 1Q25 and 4Q24 respectively.
• In 1H25, property prices climbed 1.3% from end-2024.
• Landed homes saw a 1.1% price increase; non-landed homes rose 1.5%.
• Within the non-landed segment:
  • Core Central Region (CCR): +3.1% year-to-date
  • Outside Central Region (OCR): +1.2% YTD
  • Rest of Central Region (RCR): +0.6% YTD

Despite tighter SSD measures, the impact on the broader market is expected to be limited, with the recent drop in borrowing costs providing a buffer for buyers.

2025 Outlook: Revised Forecasts for Price Growth and Home Sales

• Private residential property price growth forecast remains at +2% to +4% for 2025.
• Private new home sales forecast raised from 6,500–7,000 units to 7,000–8,000 units, reflecting robust 1Q25 sales.

While a knee-jerk negative reaction was observed in developers’ share prices post-announcement, both price and volume momentum are expected to continue—barring further policy tightening if prices outpace economic fundamentals.

Company Analysis and Investment Preferences

OCBC Investment Research maintains a preference for Singapore-listed property players that generate recurring, asset-light income streams, particularly through fund management businesses. Here is the detailed analysis and valuation outlook for the top three developers under coverage:

Order of Preference:

1. CapitaLand Investment Limited (CLI): The most preferred pick. Offers the highest potential upside (35%), robust recurring income, and a solid dividend yield of 4.4%.
2. UOL Group (UOL): Attractive upside of 30% with a healthy dividend yield and low price-to-book valuation.
3. City Developments Limited (CDL): Lower potential upside (9%) but maintains a BUY rating due to defensive strengths and stability.

Risks and Market Watchpoints

• Further property cooling measures are still possible if prices rise too rapidly relative to economic fundamentals.
• Foreign buyer demand is likely to remain subdued due to the prevailing Additional Buyer’s Stamp Duty (ABSD) and a strong Singapore dollar.

Investors are advised to monitor policy signals closely and focus on developers with resilient and recurring income profiles.

Conclusion: Navigating Singapore’s Property Market in 2025

Singapore’s property sector enters 2H25 at a crossroads. The government’s proactiveness in tightening SSD rules serves as both a warning and a stabilizer, aiming to curb speculation without derailing genuine homebuyer demand. Market fundamentals remain firm, with new home sales and price growth still expected to be positive. For investors, the sector’s outlook favors companies with asset-light, recurring income streams and prudent capital management, with CapitaLand Investment Limited, UOL Group, and City Developments Limited leading the pack.
Key Takeaways:

• SSD holding period extended and rates increased to dampen speculation.
• Private home price growth forecast at +2% to +4% in 2025; sales forecast raised to 7,000–8,000 units.
• CapitaLand Investment Limited stands out as the top investment pick.
• Risks of further cooling measures persist if market overheats.

Stay tuned for further developments, as policy shifts and market responses will play a pivotal role in shaping Singapore’s property investment landscape throughout 2025.