Commentary on changes to ABSD regime for large scale enbloc redevelopments, and the lifting of 15-month wait-out period for downgraders

CBRE's Comments

1. The government first announced a timeline extension framework for housing developers undertaking complex large-scale urban transformation developments on 6 Mar 2025 to 5.5-6 years from the typical 5 years. Since then, enbloc sales had remained tepid. Today’s further extension of the ABSD remission timelines for large site (>700 units) by 6 months to 6 years, and mega site (>1,400 units) by 18 months to 7 years, should have a more significant impact on encouraging developers to consider larger scale enbloc sites. Larger sites, in our opinion, are more efficient in reaping economies of scale during construction. They are also more transformational and thus better able to achieve “rejuvenation effects” on the precinct and ultimately offer better value to end-buyers with more facilities spread over lower maintenance costs. Developers will have more choices as well, with enbloc opportunities often in scarce, mature locations, and can be of freehold tenure, thus offering more options to end-buyers with different needs and budgets.
   
   That said, while removing a size hurdle, key challenges to successful enbloc remain divergent owner interests and uncertain deal completion timeframe. Developers generally prefer GLS sites due to greater transaction certainty with the government as the only seller and thus a more straightforward and faster process. GLS sites are currently providing about 7,500-8,000 private condominium units in annual supply.


2. Lifting of the 15-month wait-out period for downgraders may have a near term upward price pressure on hdb resale prices, and some downward rental pressure on private homes, given the reduced need to rent by downgraders during the 15-month wait-out time. However, we do not expect either effect to be significant. We understand that since its introduction in Sep 2022, HDB has processed about 1,800 appeals annually from private property owners to waive the 15-month wait-out period. This number has been “stable” over the last few years, with HDB acceding to about one in four appeals, the ministry said in a written parliamentary reply last year. This is mainly for households in financial difficulties or extenuating circumstances, who have no alternative housing options.
   
   Recall in Q2 2026, HDB resale prices have declined for two consecutive quarters in the first half of 2026, by 0.1% in 1Q26 and 0.3% in 2Q 2026; while the rental index of private residential properties rose for a second consecutive quarter, up 0.7% q-o-q in Q2 2026 and faster than the 0.3% q-o-q growth in Q1.

Event

1. Enhancements to ABSD(HD) Remission Timeline Extension Framework for Complex Projects
   To further support HDs in undertaking large-scale redevelopment projects, thereby facilitating the rejuvenation of these sites and availing additional housing supply to meet resilient housing demand, the Government will provide a further extension to the ABSD(HD) remission timelines for two groups of en bloc sites under Category 1 where the site is purchased on or after 29 Jul 2026:

a. Large Site (Category 1A) – where the site yields at least 700 residential units but less than 1,400 residential units upon redevelopment. The completion and sale timelines will be extended to 6 years, from 5.5 years currently.

b. Mega Site (Category 1B) – where the site yields at least 1,400 residential units upon redevelopment. The completion and sale timelines will be extended to 7 years, from 5.5 years currently. To ensure the timely release of housing supply for sale by developers, an intermediate sales condition will be applied. HDs of these projects will be required to sell a minimum of 50% of the residential units at the end of 6 years. Should they fail to do so, these HDs will incur the full clawback on the 35% upfront remittable component of the ABSD with interest at the end of 6 years.

 

2. With immediate effect, private residential property owners (PPOs) and ex-PPOs who purchase a non-subsidised HDB resale flat without a HDB housing loan will no longer be subject to a 15-month wait-out period. This follows several quarters of price moderation in the HDB resale market, which is showing signs of stabilisation.
   
   

   • The 15-month wait-out period was introduced as part of a series of property cooling measures on 30 September 2022 to moderate demand and promote sustainable conditions in the property market. PPOs were required to serve the wait-out period after disposing of their private residential property before they could purchase a non-subsidised HDB resale flat. This temporary measure was intended to prioritise access to public housing for first-time home buyers and ensure that HDB resale flats remain affordable for home buyers with greater housing needs.
   
   • The Government has been closely monitoring the HDB resale market, which has shown signs of stabilisation. Based on the HDB Resale Price Index, resale prices have declined for two consecutive quarters in the first half of 2026, by 0.1% in 1st Quarter 2026 and 0.3% in 2nd Quarter 2026. This follows five consecutive quarters of slower or no price growth from 4th Quarter 2024 to 4th Quarter 2025. This is further supported by a larger number of new flats completing their Minimum Occupation Period (MOP) – A rising number of BTO flats will reach their MOP in the coming years, increasing from 8,000 units in 2025 to 13,500 in 2026, 15,000 in 2027 and 19,500 in 2028; and entering the resale market over the next few years. The Government has therefore assessed that the 15-month wait-out period can now be removed.