The increase in additional buyer’s Stamp Duty (ABSD), which was implemented in January 2013, has been effective in reducing demand for condominiums from foreign investors. This is evidenced by the 71 percent decline in condo sales to foreigners over the last 12 months.

After the ABSD was increased from 30% to 60% on April 27, 2023, only 306 condominium units were purchased by foreigners between May 2023 and April 2024.

Foreigners purchased 1,064 condominium units between May 2022 and April 2023. This represents 5.4 percent of the total condo sales during that time period. From May 2023 through April 2024, this figure dropped to 1.8%.

Analysts have noted that foreign buyers are less interested in the core central region, which is the district with the highest concentration of foreign buyers.

In the 12 months leading up to ABSD’s hike, foreign buyers made up about 14 percent of condo sales within the CCR. In the last 12 months, this dropped to around 6 percent.

Data from the Urban Redevelopment Authority (URA), showed that less units were sold after the ABSD increase. The CCR sales volume dropped by 36.6%, from 4,215 units to 2,672 in the CCR.

The number of luxury apartment units priced at $10 million or more in the CCR decreased from 73 in 2022 to only 50 in 2023. However, the average price per unit of these units remained relatively constant, at $3,800.

Investors with financial stability do not feel the need to sell at a steep discount. Instead, they prefer to rent out their units. It is therefore not surprising that the prices have held steady, despite the fact that transaction volumes have slowed.

The sale of luxury homes may have also slowed because the sales process has been prolonged and financial institutions are performing more due diligence on large-ticket purchases.

Emerald of Katong condo

More foreigners, who are exempted from the ABSD of 60%, have made inquiries or committed to buying luxury non-landed residential properties in recent weeks.

Many are of South Asian descent, but hold US citizenship. Foreign buyers of non-landed luxury residential properties are more likely to look for deals that offer value for money, as opposed to paying a lot if they love a particular unit.

ABSD is not applicable to first-time residential property buyers from the US, Iceland Liechtenstein Norway and Switzerland.

After the ABSD increase, the number of Chinese buyers on the luxury market has dropped dramatically.

In 2020 and 2021 Chinese nationals were the top foreign buyers in the CCR, with 112 caveats and 155 respectively. PropNex Research data and URA showed that this number fell to 113 by 2022, and then 93 by 2023.

A caveat filed with the Singapore Land Authority secures the property for the purchaser.

The CCR now has 110 caveats from American buyers, up from 59 in 2020 and 91 caveats in 2021.

URA’s most recent data, released on 26 April, showed that the total volume of private residential sales fell by 2,4% to 4,230 units during the first quarter of 2024. This was the third consecutive quarter of decline.

From January to March 2024 there were 43 transactions with foreigners, 22 of which were to US buyers. Five were to Chinese, three to Swiss and two to Norwegians. The 11 transactions that are still unidentified do not have any information on the buyers’ nationality.

He added that foreign buyers accounted for 1.2 percent of all new and resale condominium units between January and March 2024. It is the lowest number since 1995. This figure was down from 1.7% in the fourth quarter 2023. Home sales will be primarily driven by local buyers as foreign demand declines.