News Analysis: Why The Scotts Tower Became a Loss-Making Outlier in Singapore’s Property Market

The Business Times Headline is Attention-grabbing, But The Underlying Facts of the Project Paint A More Nuanced Picture.

The Business Times reported that the share of loss-making private-home resale transactions rose from 3.7% in the first quarter of 2026 to 4.7% in the second quarter, the highest proportion since the second quarter of 2022. Yet this was not a broad property-market collapse: URA’s overall private residential price index still increased by 0.5% during the quarter, while non-landed prices in the Core Central Region, where The Scotts Tower is located, rose by 1.8%.

The more revealing finding was the concentration of the largest percentage losses. All five of the worst-performing non-landed resale deals highlighted in the Business Times table came from The Scotts Tower:

Together, the five units were originally purchased for approximately S$13.59 million and resold for S$7.86 million, producing a combined nominal capital loss of about S$5.73 million, or 42.2% of their original purchase prices. Four were bought in 2012 and one in 2017, so the annualised price declines ranged from approximately 3.9% to 5.1%.

These figures are significant, but they are price-to-price capital losses, not complete investment returns. They exclude rent collected over the holding period, but they also exclude stamp duties, mortgage interest, property tax, maintenance charges, renovation, vacancy, legal fees and sales commissions. An owner who leased the unit continuously may have recovered part of the capital loss through rent. Conversely, a highly leveraged or intermittently vacant owner may have experienced an even worse cash-on-cash result.

The Scotts Tower therefore should not be treated as proof that Singapore property generally loses money. It is better understood as an unusually clear example of what happens when a development’s original pricing, intended buyer profile and rental economics collide with a long sequence of policy changes.

Designed for a Buyer Segment That Became the Focus of Subsequent Cooling Measures

The Scotts Tower is a 231-unit development at 38 Scotts Road, completed in 2016 with a 103-year lease. Far East Organization describes it as a “Far East SOHO Development,” emphasising high ceilings, open layouts and a live-work-play concept.

Its unit mix is unusually concentrated.

Approximately 90% of the development consists of one- and two-bedroom homes. The one-bedroom units are generally 624 to 657 square feet, while most two-bedroom units are around 904 to 907 square feet.

That is important because policy does not affect every property product equally.

A conventional three- or four-bedroom suburban condominium can appeal to Singaporean families purchasing their first private home. Such a household may have two working incomes, may be selling an HDB flat and may pay no ABSD if the buyers are Singapore citizens purchasing their first residential property.

A compact SOHO unit in the Core Central Region is more likely to draw demand from a narrower mixture of:

• Singles and couples who value centrality more than space;
• Investors purchasing a second or subsequent property;
• Permanent residents and foreigners;
• Landlords serving expatriate and corporate tenants;
• Companies acquiring accommodation or investment assets.

The PropNex residential analysis chart reinforces this exposure. It identifies the project’s purchaser mix as approximately 56.79% foreigners, 17.9% permanent residents, 22.84% Singapore citizens and 2.47% companies. The underlying methodology and period are not shown in the screenshot, so the percentages should be treated as indicative rather than independently audited. Nevertheless, they are directionally consistent with the development’s prime location, small-unit concentration and SOHO positioning.

This is the central vulnerability: The Scotts Tower was optimised for the part of the housing market that subsequent policy rounds were specifically intended to restrain—foreign purchasing, corporate purchasing, investment demand and leveraged additional-property purchases.

Nearby primary schools may improve the location’s general attractiveness, but they do not overcome the project’s physical unit distribution. A household with two children is unlikely to choose a 624-square-foot one-bedroom SOHO unit merely to be near a school. School proximity therefore does less for The Scotts Tower than it would for a family-oriented project with predominantly three- and four-bedroom apartments.

The ABSD Ratchet Progressively Closed the Project’s Resale Exit Door

Additional Buyer’s Stamp Duty was introduced in December 2011 expressly to moderate investment demand, particularly demand from foreigners and corporate entities. Foreign purchases had reached 19% of private residential purchases in the second half of 2011, compared with 7% in the first half of 2009, according to the government’s announcement.

Since then, the tax burden on the buyer groups most relevant to The Scotts Tower has escalated dramatically.

Permanent residents currently pay 5% on their first residential property, 30% on their second and 35% on their third or subsequent property. Foreigners generally pay 60% on any residential purchase, while entities and trusts generally pay 65%.

There are limited treaty exceptions. Nationals of the United States, and nationals or permanent residents of Iceland, Liechtenstein, Norway and Switzerland, may qualify for the same ABSD treatment as Singapore citizens under applicable free-trade agreements.

The policy asymmetry between the original owners and their potential exit buyers is particularly stark:

• Four of the five loss-making units were purchased in 2012. At that point, TDSR had not yet been introduced. A foreign buyer generally faced 10% ABSD, while a Singaporean buying a second residential property did not yet face ABSD.
• The 2017 purchaser bought after TDSR had been imposed, but before the 2018, 2021 and 2023 ABSD increases.
• A 2026 foreign purchaser generally faces 60% ABSD, and a company generally faces 65%.

Consider the S$1.87 million resale unit highlighted by The Business Times. ABSD alone would now amount to:

Buyer’s Stamp Duty would be payable in addition.

A foreigner purchasing that S$1.87 million unit could therefore incur an acquisition cost of roughly S$3 million before legal fees and financing costs. By comparison, the same foreign-buyer profile would generally have paid only S$187,000 in ABSD under the 2012 rate.

The economic consequence is not merely that buyers dislike paying tax. ABSD reduces the price a rational investor can offer for the underlying property.

Suppose two buyers assign the same economic value to a unit before transaction taxes. A buyer facing no ABSD can devote nearly the entire budget to the property price. A buyer facing 60% ABSD must reserve more than one-third of the all-in budget for tax. Unless the expected rent or future appreciation is extraordinarily high, the foreign buyer either submits a much lower offer or exits the market entirely.

Companies face an even greater obstacle at 65%. Direct corporate ownership of an ordinary residential investment property is therefore generally uneconomic unless there is an exceptional strategic reason for the purchase.

The government’s stated purpose is consistent with this result: ABSD is designed to moderate investment demand and prioritise housing for owner-occupation. The Scotts Tower is exposed precisely because owner-occupiers are not the only—or historically even the dominant—buyers for its product.

TDSR Turned A Lifestyle Purchase Into An Income Qualification Problem

TDSR is the short form of Total Debt Servicing Ratio.

TDSR was introduced in June 2013. Financial institutions were required to calculate a borrower’s total monthly debt obligations—including the proposed mortgage, car loans, unsecured borrowing and other debt—as a percentage of gross monthly income. Loans above the original 60% threshold were to be granted only exceptionally.

In December 2021, the threshold was tightened from 60% to 55%. In September 2022, the medium-term interest-rate floor used to calculate borrowing capacity was raised from 3.5% to 4%, or the applicable market rate if higher.

This matters greatly for a product marketed towards singles, independent professionals and small households. A family-oriented property can be supported by two co-borrowers’ incomes. A one-bedroom SOHO unit may be attractive to a single buyer, but that buyer must qualify largely on one income.

An illustrative calculation shows the effect. Assume:

• A buyer with no existing housing loan;
• A 75% loan-to-value mortgage;
• A 30-year loan tenure;
• A 4% TDSR assessment rate;
• No other monthly debt.

These are simplified illustrations, not mortgage quotations. Actual eligibility depends on age, loan tenure, interest rates, variable-income haircuts, existing obligations, available cash and CPF funds, and whether the borrower already has another housing loan.

Nevertheless, the direction is clear. At the original purchase price of approximately S$3.3 million, the 904-square-foot unit would require a very high household income even before accounting for other debt. At its 2026 resale price of S$1.87 million, it becomes accessible to a materially larger local buyer pool.

That does not mean TDSR mechanically caused a 43% fall. TDSR applies across Singapore, including to properties that appreciated.

Its project-specific effect comes from the interaction between: high initial quantum + small investment-oriented unit + likely single-income purchaser + narrow local owner-occupier appeal.

TDSR is therefore best understood as an amplifier of an existing product-positioning problem, rather than a complete standalone explanation.

Rental Income Created A Ceiling That The Original Prices Could Not Defend

The most important non-tax explanation is rental yield.

A property investor ultimately pays for a stream of future rental income. If rents fail to grow sufficiently, the resale price cannot indefinitely remain disconnected from that income stream. Buyers can tolerate a low yield when they expect strong capital appreciation, but once policy deliberately suppresses investment and foreign demand, rental income becomes a more important valuation anchor.

Recent rental indications for The Scotts Tower include approximately S$3,850 to S$4,800 a month for 600-to-700-square-foot units and around S$6,000 a month for units in the 900-to-1,000-square-foot range. The project has a substantial recorded rental history, consistent with its investor and tenant-oriented positioning.

Using those rents illustrates why resale prices settled far below the original launch prices.

The 624-square-foot unit

The unit sold for S$1.10 million in June 2026 after an earlier purchase at approximately S$2.124 million.

At a monthly rent between S$3,850 and S$4,800:

• Gross yield on the 2026 resale price is approximately 4.2% to 5.2%.
• Gross yield on the original purchase price is only approximately 2.2% to 2.7%.

The 904-square-foot unit

The unit sold for S$1.87 million after an earlier purchase at approximately S$3.299 million.

At approximately S$6,000 monthly rent:

• Gross yield on the 2026 resale price is approximately 3.9%.
• Gross yield on the original purchase price is approximately 2.2%.

These are gross yields before property tax, maintenance, repairs, vacancy and leasing expenses. Net yields would be lower.

The implication is powerful: the 2026 prices look far more consistent with the rent the units can actually produce than the original 2012 prices did.

This is why it is not quite accurate to say that rental prices “fell because of ABSD.” ABSD does not prevent a foreigner or expatriate from renting a home. Foreign tenant demand can remain healthy even when foreign purchases collapse.

Instead, the chain works like this:

ABSD removes or weakens investment buyers → remaining buyers demand a better rental yield → the price must fall until rent divided by price becomes sufficiently attractive.

In other words, rent is the valuation anchor, while policy changes the capitalisation rate—or the return buyers require before they are willing to purchase.

This also helps explain why the property can perform well as a rental product but badly as a capital-gains product. A centrally located SOHO apartment can be highly rentable at S$4,000 to S$6,000 per month and still be a poor investment if it was originally purchased at S$3,200 to S$3,650 per square foot.

While Policy Was A Major Contributing Factor, It Was Not The Sole Reason Behind The Project’s Performance.

The evidence strongly supports the argument that government regulation has disproportionately affected The Scotts Tower. The project had unusually high exposure to foreigners, companies and investment buyers; its compact SOHO format is less aligned with the locally dominated, family owner-occupier market that current policies favour; and its resale buyers face much more restrictive tax and financing conditions than its original purchasers did.

However, the losses cannot be attributed almost exclusively to policy for several reasons.

First, policy was market-wide, but the losses were project-concentrated. In the same quarter that The Scotts Tower recorded the five largest percentage losses, CCR non-landed prices as a whole rose 1.8%. Only 4.7% of all private-home resale transactions were loss-making. This indicates that policy alone does not automatically produce losses of 36% to 48%.

Second, the original units were purchased at exceptionally high prices of approximately S$3,240 to S$3,649 per square foot. Their 2026 exits were around S$1,762 to S$2,156 per square foot. A policy shock can explain why the buyer pool no longer supported the original premium, but it does not by itself explain why buyers initially paid prices that rental income would struggle to justify.

Third, the development’s small-unit concentration is a structural feature, not a policy decision. Roughly 90% of one- and two-bedroom units made the project efficient for tenants and investors but less relevant to the broadest source of resilient demand: Singaporean owner-occupier families.

Fourth, the article’s loss calculations ignore rental income. Owners who collected rent for eight to fourteen years may have recovered a meaningful portion of the nominal capital loss. The correct investment analysis would require the full sequence of rents, vacancies, mortgage interest, taxes, maintenance expenditure and acquisition costs.

Our conclusion is therefore:

The Scotts Tower’s losses were not created by regulation alone. They arose because an expensive, investor-oriented and foreigner-exposed product was repriced after regulation radically reduced the number and purchasing power of the buyers for whom it had originally been designed.

What The Scotts Tower Teaches Us About Loss-making Projects In Singapore

The broader lesson is that location and proximity to an MRT station are not enough. A property can be well designed, centrally located, heavily rented and still lose money when the entry price is inconsistent with its sustainable buyer pool and rental income.

A Singapore project is at greater risk of loss when several of these conditions overlap:

The analytical question when choosing to buy a property is therefore not simply, “Is this a good project?” It is:

Who will buy this unit from me later, what taxes and financing rules will that buyer face, and what rent will support the price if capital appreciation disappears?

At The Scotts Tower, the answer changed profoundly between 2012 and 2026. Original owners bought into a market with looser credit, far lower foreign and corporate ABSD, and stronger expectations of investor-led appreciation. Their exit buyers entered a market engineered to prioritise first-home owner-occupation, prudent leverage and locally supported demand.

That policy transition was the catalyst. The original pricing and product concentration determined the scale of the losses.

Disclaimer: This article is intended solely for informational and educational purposes and reflects the author’s independent analysis and opinions based on publicly available information, including transaction data, planning documents, developer materials and other third-party sources available at the time of writing.

The views expressed should not be interpreted as financial, investment, legal or property advice, nor should they be regarded as a recommendation to buy, sell or hold any property. Real estate values are influenced by numerous factors, including market conditions, financing costs, government policies, supply and demand, individual property attributes and each buyer’s or seller’s unique circumstances.

The discussion of The Scotts Tower is intended as a case study to understand the factors that may have contributed to its resale performance. It should not be interpreted as a definitive assessment of the development, its developer, current owners or future investment prospects. Individual transactions may differ significantly depending on the unit type, purchase price, holding period, renovation, financing structure and prevailing market conditions.

While reasonable efforts have been made to ensure the accuracy of the information presented, no representation or warranty is made regarding its completeness or accuracy. Readers are encouraged to conduct their own due diligence and seek advice from qualified professionals before making any property or investment decisions.

Article contributed by Jerry Wong.

Jerry Wong is a realtor at Propnex Realty, bringing a rich background in interior and lighting design to his work. He loves exploring diverse spaces and observing the transformative power of real estate. Beyond his professional role, Jerry finds his greatest fulfillment in connecting people with the right properties, gaining immense satisfaction from helping clients achieve their dreams.

Articles You May Also Like

Analysis & Insights,Blog

The Robertson Opus $100K–$200K Discount Analysis Part 2: Why Purchase Quantum and Resale Liquidity Matter More Than $PSF Alone

19 September, 2026

Blog,Guides & Reviews

Newport Residences Unit Types Review: Which Layout Best Suits Investors, Couples and Family Buyers?

19 September, 2026

Analysis & Insights,Blog

S$3 Billion Money Laundering Properties Fail to Sell at Auction: Are Buyers Waiting for a Bigger Discount?

18 September, 2026

Analysis & Insights,Blog

The Robertson Opus $100K–$200K Discount Analysis Part 1: What Rental Yield Can Buyers Expect?

18 September, 2026