_Shaping Singapore’s dynamic real estate landscape

At the Spring Festival luncheon organised by Real Estate Developers' Association of Singapore (REDAS) on 7 February, Minister for National Development Desmond Lee delivered a keynote speech on topics including Central Business District Incentive (CBDI) and Strategic Development Incentive (SDI) scheme updates, and boosting environmental sustainability via new initiatives such as carbon optioneering assessments. 

In the lead-up to Prime Minister Lawrence Wong’s Budget 2025 announcements on February 18, this could signal a positive sign of things to come. The government is expected to focus on key issues such as maintaining market stability, addressing housing affordability, and promoting sustainability in the real estate sector.

But while policies set the direction, the real impact will come from how the industry responds. Singapore’s real estate sector stands at a turning point. The opportunity isn’t just to keep up with policy shifts but to lead the charge in building a future-ready city—one that is vibrant, inclusive, and sustainable.

Here’s what I think we can work on --

Balancing Market Growth with Strategic Policy Adjustments

1. Reassessing Foreign Buyership Policies to Attract Global Capital

Singapore’s reputation as a stable, high-quality investment destination has always been a magnet for global capital. But the 60% Additional Buyer’s Stamp Duty (ABSD) on foreign homebuyers has significantly dampened foreign demand.

In 2024, prime non-landed home sales dropped 22.1%, with transaction values slipping from S$1.7 billion to S$1.4 billion. Historically, foreign homebuyers only made up 4.7%–6% of private residential transactions, mostly in the Core Central Region (CCR) where homes typically exceed S$5 million—a segment that doesn’t compete directly with local housing demand.

We propose possible adjustments such as:

• Reducing land ABSD to encourage investment;
• Extending the 5-year ABSD deadline for developers to avoid forced sell-offs; and
• Moderating ABSD for foreigners in ultra-luxury segments

could revitalise luxury home demand without overheating the broader housing market. Encouraging measured foreign investment would also de-risk development projects, promoting developer participation towards land tender sales and ensuring a steady pipeline of high-quality housing.

2. Expanding Redevelopment Incentives for Sustainable Urban Growth

Singapore’s land constraints mean maximising urban space is a necessity, not a luxury. While the CBDI and SDI schemes provide strong incentives for redevelopment, the process remains lengthy and expensive, often requiring a full-scale rebuild.

A more flexible policy that rewards major Addition & Alteration (A&A) works—rather than just complete redevelopment—could accelerate land intensification without excessive demolition waste. For example, incentivising developers with:

• Extra Gross Floor Area (GFA) allocations for modernising ageing assets;
• Lower regulatory costs for A&A projects that boost sustainability and achieve carbon reduction outcomes; and
• Land Betterment Charge (LBC) concessions for underutilised and less functional properties,

could fast-track urban rejuvenation while reducing environmental impact, aligning with Singapore’s sustainability goals.

3. Prioritising Adaptive Reuse and Sustainable Modernisation

With a large portion of HDB precincts aged over 50 years, future housing policy must address ageing estates with adaptive reuse and modernisation strategies rather than outright redevelopment.

Sustainable upgrades could extend the life cycle of ageing HDB blocks, incorporating green retrofits, energy-efficient systems, and better community spaces
New transitional housing models could minimise displacement of residents while precincts undergo modernisation
Incentivising private-sector involvement through adjusted LBC could encourage investment in built-to-rent senior living communities
Such measures would breathe new life into ageing estates, meeting Singapore’s evolving demographic needs while supporting sustainability goals.

4. Accelerating Suburban Land Supply for Decentralised Growth

While urban rejuvenation is necessary, Singapore’s long-term liveability depends on suburban expansion. The private housing supply pipeline is tightening, and an increased release of mixed-use Government Land Sales (GLS) sites in suburban areas could:

Boost housing availability while mitigating price escalations
Support “Work Closer to Home” initiatives, reducing CBD congestion
Encourage self-sufficient, integrated townships with vibrant residential, retail, workplaces and recreational elements

Expanding suburban development also presents an opportunity to pilot next-generation urban planning models, integrating AI-driven smart city solutions and sustainable infrastructure to create future-proofed communities.

5. Encouraging Community-Driven and Wellness-Centric Developments

Beyond housing, real estate policies should incentivise vibrant and inclusive spaces. A more flexible GFA framework that excludes common and wellness facilities from GFA calculations could:

• Encourage recreational and wellness-focused developments by making communal spaces more financially viable
• Foster more liveable, community-oriented environments by incentivising green spaces, co-living areas, and family-friendly amenities

Developments that prioritise collaboration spaces, wellness hubs, and sustainable retail formats would help Singapore stay competitive in an era where liveability is key to attracting global talent and investment. 

The Road Ahead: A Balanced Approach for Long-Term Growth

As we move towards Budget 2025, the real estate industry must look beyond short-term cycles and focus on long-term sustainability, innovation, and resilience.

A balanced approach—one that adjusts foreign homebuyership rules, expands redevelopment incentives, accelerates suburban land supply, and prioritises adaptive reuse—can ensure that Singapore remains a global leader in urban planning and real estate excellence.

This is more than just about managing property cycles. It’s about planning for significant changes in the long haul, and shaping the future of Singapore’s real estate ecosystem.

Singapore has long been at the forefront of urban innovation—now is the time to lead again!