FOREIGN DEMAND
Singapore imposed new property curbs on Apr 27, doubling the additional buyer’s stamp duty (ABSD) to 60 per cent for foreigners buying any residential property.
Singaporeans buying their second residential property will pay an ABSD rate of 20 per cent, up from 17 per cent, while those buying their third and subsequent residential property will have to pay an increased rate of 30 per cent, up from 25 per cent.
The rate of 30 per cent also applies to permanent residents buying their second residential property. PRs buying their third and subsequent residential property will pay an ABSD of 35 per cent, up from 30 per cent.
The increased ABSD appears to have had an impact on foreign buyers, said PropNex’s head of research and content Wong Siew Ying.
“Feedback from our luxury home sales team indicates that while the number of viewings among foreigners generally remains steady, such investors are less forthcoming about buying right now, particularly for big-ticket homes, following the latest ABSD hike,” she said.
“It is still early days yet, but we think the ABSD rate hike appears to be taking effect in crimping foreign investment demand.”
However, because of Singapore’s stable governance and strong currency, some Chinese buyers “may still bite the bullet” to invest in property here, said ERA’s Mr Lim.
Ms Tricia Song, CBRE’s head of research for Southeast Asia, expects the share of foreign purchases to moderate in 2023.
“Nonetheless, we expect to see sustained demand from the Americans who are exempted from paying the ABSD on the first residential property purchase in Singapore due to the free-trade agreement,” she added.
“With a slowdown in foreign demand, the overall pie for homebuying is expected to shrink in 2023, and developers may push back some of the launches to the second half of this year, especially those located in the prime areas.”
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