Cooling Measures Huge Turn-Off for Foreign Property Buyers

2012-09-18 16.46.13

For most of 2012, the cooling measures have worked in turning away foreign buyers. In general the Additional Buyer Stamp Duty (ABSD) has been quite effective in curbing foreign interest in the Singapore real estate market.

According to an article published in The Straits Times on 20th November,

foreign purchases made up just 7 per cent of the private market in the three months to Sept 30, well down from their 18 per cent share for the whole of last year - The Straits Times 20th November 2012

I am of the view that further taxation of foreign property ownership is to the detriment of the Singapore economy. I do encourage long term investment of real estate, and agree that the Seller Stamp Duty (SSD), is a good way to prevent speculators (both local and foreign) from creating unnecessary volatility of prices (read excessive inflation of prices), which can and will result in a real estate bubble if it was not arrested in time.

Suburban project Bartley Residences topped the table with 18 sales to foreigners while city fringe development One Dusun Residences and V on Shenton, in the central business district, were tied for second with 14.

Other mass market projects also enjoyed keen interest from foreign buyers, including Hillsta in Choa Chu Kang, Parc Centros in Punggol, The Palette in Pasir Ris and My Manhattan in Simei.

While sales are down from a year earlier, interest from some nationalities seems to be creeping back with the market share of mainland Chinese buyers – including permanent residents (PRs) – climbing again.

After an initial sharp pullback in the first quarter as the additional buyer’s stamp duty (ABSD) of 10 per cent for all foreign purchases hit, mainland Chinese buyers overtook Indonesians in the third quarter to clinch second place after Malaysians.

Including PRs, Chinese buyers accounted for 22 per cent – or 397 units – of all purchases made by non-Singaporeans in the three months to Sept 30. This is below the 28 per cent recorded by this group for the whole of last year.

Purchases by Americans also received a boost after the ABSD was implemented as they are one of the five nationalities exempt from the extra 10 per cent tax.

Americans bought 10 homes in the exclusive Sentosa Cove estate this year – Chinese buyers snapped up eight – to become the top non-Singaporean buyers group there. – The Straits Times 20th November 2012

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