The hike in the additional buyer’s stamp duty ABSD) for property has resulted in a steep fall in demand from foreigners, with analysts expecting the dampening effect to persist for an extended period.
In January 2023, foreign buyers accounted for 5 per cent of nonlanded private resale home transactions, before falling to 3.7 per cent in May after the ABSD for foreigners was increased from 30 per cent to 60 per cent on April 27, noted PropNex Research.
The figure fell further to 1.2 per cent in September, and, by October, had slipped to 1.1 per cent, or nine transactions.
PropNex head of research and content Wong Siew Ying said that of the nine transactions linked to foreigners, seven involved buyers from the United States, and one each from Switzerland and Oman.
Ms Wong expects Singaporean and Singapore permanent resident PR) buyers to continue to dominate resale condo sales.
She said that according to Urban Redevelopment Authority URA) Realis data, foreigners from nonexempted jurisdictions accounted for 104 out of 165 resale condo transactions by foreigners from January to April, compared with 42 transactions from May to Nov 24.
Under existing free trade agreements, buyers from the US, Iceland, Liechtenstein, Norway and Switzerland do not need to pay ABSD for their first residential home in Singapore.
They have to fork out the extra stamp duty for subsequent residential properties.
“Overall, we would expect the punitive ABSD rate for foreigners to weigh on the sales of high-end homes,” said Ms Wong.
However, she added that anecdotal feedback indicates that there will still be some big-ticket property purchases, perhaps among foreigners holding a US passport”.
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