Luxury home sales fall 50% on-year in Q1, with just one foreign buyer – CNA

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Observers said the doubling of property taxes has dampened the interest from foreign investors in buying residential properties in Singapore.

In April last year, the ABSD for foreign buyers of residential homes was raised from 30 per cent to 60 per cent, as part of cooling measures set by the government to stabilise the market.

This means that for a S$5 million home, buyers will have to pay about S$3 million in taxes.

“Traditionally, (the luxury segment) attracts a lot of foreign buyers. But since the introduction of the new ABSD last year, we saw the number of foreign buyers drop significantly,” said Professor Sing Tien Foo, Provost’s Chair Professor at the Department of Real Estate at the National University of Singapore’s (NUS) Business School.


Prof Sing said that should demand continue to remain weak, developers – especially those nearing the deadline for their ABSD remission – could decide to revise down their prices to attract more buyers. This could lead to spillover effects on other segments of the market.

The absence of foreign buyers will also drive up local demand, he added.

“If the market sentiment continues to be weak, and external environments more uncertain, then we probably will see this impact,” he said. “Especially when the price gap narrows, this will probably attract (more) local buyers… with more choices such as better locations. This will have an impact on new launches and how they will set their pricing.”

Indeed, Singaporeans have surpassed foreigners to form the largest group of buyers of luxury homes since the third quarter of last year.

An agent who specialises in such sales told CNA that 80 per cent of the enquiries now come from locals, and more than half go on to sign on the dotted line for a unit.

“Singaporeans are buying homes for various reasons, including the desire for home ownership, upgrading, long-term investments for capital gain, rental income or as a status symbol. Some parents buy properties to build as a legacy to pass onto their children,” said real estate agent Jasmine Png.


Market watchers said prices for the property market on the whole are still rising, but at a slower rate.

Prof Sing believes the ABSD is likely here to stay. “Any possible changes (to the ABSD) I think there will be further tightening, especially on the second home, especially for the investors,” he said.

“For local investors, we continue to see active investment demand for this market which currently holds up these prices and pushes up some of the prices especially around central region projects.”

Despite the ABSD, there are still overseas investors interested in the Singapore property market, mostly due to the strong Singapore currency and the city-state’s reputation as a safe investment destination, said observers.

They expect to see continued demand – albeit at a slower pace.

“We still see foreign buyers buying today, though a lot less than pre-ABSD rate hike. These predominantly are the ultra-high net-worth foreign buyers,” said Mr Eugene Lim, key executive officer at real estate agency ERA Realty.  

“They prefer Singapore’s real estate market primarily because they look at it as a safe investment. The Singapore dollar is also very strong and so it means their investment here is a good storage of value.”

Real estate firms ERA and OrangeTee said private home prices could increase by up to 6 per cent this year, lower than the 10.6 per cent growth in 2021.

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