Savills warns of higher cost of doing business in SG due to ABSD rate hike

The government’s move to increase the Additional Buyer Stamp Duty (ABSD) for purchasing property may create friction in the smooth functioning economy of Singapore, an industry expert at Savills has warned.

Alan Cheong, Savills Singapore’s head of research, said there will be a time when the availability of rentable properties for foreigners who come to Singapore for work will diminish. By dissuading Singaporeans and PRs who buy properties for investments, there will come a time when the ratio of available properties for rent relative to the size of the tenant market will decline.

“Over time, once economic recovery takes place, there will be an increase of foreigners coming here to work again. As the number of foreign workers coming here keeps increasing, by chasing investors into the residential market, we are actually crimping the supply of rentable properties and that will tighten up the rental market,” said Cheong. “The long term implication is, it just raises the cost of doing business here in Singapore,” he added.