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The number of foreigners buying condominiums in Singapore fell in the second quarter of 2023, after the government doubled the Additional Buyer's Stamp Duty (ABSD) for foreign buyers to 60%.
A total of 205 private non-landed homes were bought by foreigners in the second quarter, down 22.6% from 265 units in the previous quarter.This decline was led by a sharp drop in purchases by mainland Chinese buyers, who replaced Americans as the largest group of foreign buyers in Singapore.
The number of transactions by mainland Chinese buyers fell by 53.2% from 109 units in the first quarter to 51 units in the second quarter.In contrast, the number of condominium units purchased by Americans rose by 10.7% from 50 units in the first quarter to 56 units in the second quarter.
The government's decision to double the ABSD for foreign buyers was aimed at cooling the property market and making it less attractive for foreign investors. The measures seem to have had the desired effect, as the number of foreign purchases of condominiums has fallen sharply.
The change in the top foreign buyer group is also interesting. Americans have traditionally been a smaller group of foreign buyers in Singapore, but they have been more active in recent months. This may be due to a number of factors, such as the strong US economy and the weak Singapore dollar.
It will be interesting to see how the property market in Singapore evolves in the coming months. The government has said that it will continue to monitor the market and take further action as necessary.
Here are some additional details about the decline in foreign demand for Singapore condominiums:
The decline was seen across all price segments, but it was most pronounced in the luxury segment.
The decline was also seen in all major districts, but it was most pronounced in the central districts.
The decline was driven by both a drop in the number of transactions and a fall in the average price per unit.
The government's decision to double the ABSD for foreign buyers was likely a major factor in the decline in demand.
The ABSD is a tax that is imposed on the purchase of property in Singapore by foreign buyers. The higher the ABSD, the less attractive the property market becomes to foreign investors.
The government has said that it is committed to cooling the property market and making it more affordable for Singaporeans. The doubling of the ABSD is one of a number of measures that the government has taken in recent years to achieve this goal.
It is too early to say what the long-term impact of the government's measures will be on the property market.
However, the sharp decline in foreign demand for condominiums in the second quarter is a clear indication that the measures are having an effect. It will be interesting to see how the market evolves in the coming months.
*Image for Illustration Purpose only- Photo of Empty Showflat
Source: https://www.straitstimes.com/singapore/housing/fewer-foreigners-bought-condos-in-q2-after-absd-doubled-americans-overtake-chinese-as-largest-buyer-group