Fewer foreigners bought condos in Q2 after ABSD doubled; Americans the largest buyer group
Fewer foreigners purchased condominium units in the 2nd quarter of 2K23 as they were appaulled by the sharp increment of the additional buyer’s stamp duty (ABSD) for foreign buyers to 60 per cent in end-April. A total of 205 private non-landed homes were bought by foreigners in the second quarter, down 22.6 per cent from 265 units in the previous quarter, a report by OrangeTee & Tie released on Thursday showed. The figures exclude executive condominiums (ECs) which foreigners are not allowed to buy. The proportion of foreign purchases also fell from 6.9 per cent to 4.2 per cent over the same period. The higher tier of ABSD rate in the latest round of cooling measures hit foreigners the most , which were introduced on April 27 after the proportion of foreign buyers had steadily crept up over the previous few quarters. Americans, who did not feel the pinch as they are subject to the same stamp-duty treatment as Singaporeans, overtook mainland Chinese as the largest group of foreign buyers in the second quarter, the report showed. Singaporeans buying their first home are not subject to ABSD. Mainland Chinese contributed to the most number of sales in Singapore from 2K17 to 2K22 and in the first quarter of 2K23, said Ms Christine Sun, OrangeTee & Tie’s senior vice-president of research and analytics. Americans, along with nationals from Iceland and Norway, among others, are accorded the same stamp-duty treatment as Singapore citizens, based on respective free-trade agreements about a decade ago. Ms Sun said Americans may continue to be among the top foreign buyers in Singapore as they are less affected by the increased ABSD. “Other foreigners may purchase properties after becoming Singapore citizens or PRs since they pay less ABSD. Some may switch to buying non-residential properties,” she said.Since April 27, Singaporeans buying their second residential property have to pay an ABSD rate of 20 per cent, up from 17 per cent. Those buying their third and subsequent property will pay 30 per cent, up from 25 per cent.The rate for Singapore permanent residents (PRs) buying their second residential property went up from 25 per cent to 30 per cent, and from 30 per cent to 35 per cent for third and subsequent properties.