Trade Tariffs Impact New Launch Market: Is a Window for ABSD Easing Emerging?

Tariffs Hit, Buying Fervour Wanes: New Launch Delays May Become the New Normal

The recent announcement of multiple rounds of trade tariffs by the United States has sparked global economic uncertainty, triggering fluctuations across major markets including Hong Kong and Singapore. Singapore’s luxury new launch segment has also begun to show signs of cooling: launch weekend take-up rates slipped in April 2025, with One Marina Gardens moving just 38% of units and Bloomsbury Residences achieving a 25% conversion rate.

A primary factor behind this trend is the gradual dissipation of buyer FOMO (fear of missing out). Amid previous red-hot launch weekends, buyers often rushed their decisions for fear of being priced out; however, sentiment has since turned cautious. As enthusiasm yields to a wait-and-see posture, transaction momentum has moderated.

Market Softens: A Turning Point for Developers and Policymakers

Against the backdrop of a cooling new launch market, expectations are growing that the government may re-evaluate the Additional Buyer's Stamp Duty (ABSD) framework. Under current rules, Singapore Citizens (SCs) pay 20% ABSD on their second property and 30% on their third and subsequent homes; Singapore Permanent Residents (SPRs) pay 30% on their second property and 35% on subsequent purchases; while foreigners are subject to a 60% ABSD on any residential acquisition.

Should new launch momentum continue to flag, the authorities could consider a calibrated reduction in ABSD to stimulate demand once broader political conditions stabilise. The window for such policy recalibration is becoming increasingly visible, presenting an opportunity to anchor market confidence while safeguarding national fiscal revenues.

A Measured Easing, Not a Free-for-All: Prudence Remains Key

Discussions surrounding the relaxation of ABSD do not suggest a blanket deregulation across all buyer profiles. Current deliberation focuses on local buyers purchasing second or subsequent properties, as well as select high-net-worth foreign purchasers. Any prospective adjustment would preserve the core principle of prioritising genuine home upgraders, ensuring first-time buyers retain their distinct advantage.

Furthermore, policymakers will be keen to prevent an over-exuberant rebound in speculative buying. Any recalibration will likely be rolled out cautiously and tested incrementally in response to macroeconomic indicators and ongoing market feedback.

Historical Precedents: Market Stability Trumps Short-Term Stimulus

Historically, adjustments to Singapore's property cooling measures have tended to spur a short-term rebound in transaction activity before settling into equilibrium. Should ABSD rates be adjusted this time, the primary objective would not be an immediate demand surge, but rather anchoring long-term market expectations and reinforcing institutional and individual confidence.

Given that US trade dynamics remain volatile, a well-calibrated policy signal would provide timely reassurance without inadvertently reigniting runaway speculation.

Conclusion: Calibrating ABSD Is Just the Start; Market Confidence Is Key

While ongoing tariff headwinds are curbing FOMO-driven buying momentum, they also provide policymakers with a window to review prevailing cooling measures. A measured easing of ABSD would help unlock pent-up upgrading and asset-reallocation demand, while potentially reigniting foreign capital inflows.

Ultimately, however, a sustained recovery will depend on broader macroeconomic stability, a resilient labour market, and renewed confidence among buyers about future prospects.

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