Impact of Cooling Measures on the Singapore Property Market in 2025
Though this post is a bit late, it’s still important to understand the cooling measures coming in 2025. These changes will affect both buyers and sellers, so let’s dive into what you need to know.
So what is the change ? HDB loan will decrease from 80% to 75% of Loan-to-value. 5% seem small, but lets deep dive how it affects everyone and you.
For Buyers
High-Income Buyers (Earning $14K and Above)
If you’re earning $14K or more, you’re likely unaffected by these changes, as you’ll probably be taking a bank loan, which isn’t impacted by the new downpayment and LTV requirements.
Middle-Income Buyers (Earning Below $14K)
For buyers earning less than $14K, the new rules will increase your downpayment by 5%. For example, if you’re buying an HDB flat at $500K, you’ll need to top up an additional $25K, making your total downpayment $125K (excluding other fees). On the upside, this means lower monthly repayments.
Lower-Income Buyers
The Enhanced Housing Grant (EHG) has increased from $80K to $120K, helping to offset the higher downpayment costs, making it easier for lower-income buyers to get on the property ladder despite rising prices.
For Sellers
High-Value HDB Flats (Above $900K)
If you’re selling an HDB valued above $900K, the impact will be minimal. The buyer pool for these flats mainly consists of private sector buyers or high-income individuals who aren’t as affected by the new loan policies.
4-Room HDB Flats (Under $900K)
The 4-room HDB segment is likely to be more affected. With a higher supply of new and MOP flats entering the market in 2025, combined with more cautious buyers, prices in this segment may see slower appreciation or even stagnation.
Flats Below $500K
Properties under $500K are likely to see increased demand, especially from buyers utilizing the enhanced EHG. More affordable options will attract those looking for budget-friendly homes.
Overall Market Impact
These cooling measures are designed to keep HDB prices affordable and prevent a housing bubble. Buyers may face higher upfront costs, but with lower monthly repayments. Sellers in the 4-room HDB segment may face challenges with price growth due to increased competition.
If you’re looking to restructure your property portfolio, now is a good time to review your strategy, as these measures could slow price increases.
Conclusion
While these measures may pose some short-term challenges, they aim to keep the housing market sustainable and affordable. Whether you’re buying or selling, it’s important to understand the impact and adjust your strategy accordingly.
