New Reporter
05-09-23, 10:54
The new normal in Singapore’s prime condo market
August 31, 2023
In the wake of the property cooling measures at the end of April, Steve Tay, who founded his eponymous real estate agency in early July, saw a sharp decline in enquiries from foreigners looking to purchase homes in Singapore.
Foreign buyers are now hit with a 60% additional buyer’s stamp duty (ABSD) on all residential property purchases, double the rate from 30% before. “Many are taking a backseat and evaluating their options,” says the executive director of Steve Tay Real Estate (STRE), which focuses on luxury homes.
When the ABSD for foreigners was raised to 30% in December 2021, “we could still convince foreign buyers that Singapore is a stable investment destination, because Australia, Canada, Hong Kong and the UK had also raised taxes on foreign home buyers by a similar quantum,” says Desmond Sim, CEO of Edmund Tie.
“But at 60% ABSD, it’s a clear sign that the government doesn’t just want foreign capital to enter Singapore,” adds Sim. “They want foreigners to grow roots here and contribute more towards Singapore’s economy beyond just injection of capital.”
https://i.imgur.com/AMO64v1.jpg
https://i.imgur.com/fZqJdJo.jpg
US citizens top foreign buyers
Not surprisingly, foreign home purchases in Singapore fell in 2Q2023 after the cooling measures were implemented in April, says Christine Sun, senior vice president of research & analytics at OrangeTee & Tie, in her July 19 report. “Prices of private residential homes have also shown signs of moderation and stabilisation as more housing supply comes onstream.”
US citizens emerged as the top foreign buyers in Singapore, having purchased the most condos in 2Q2023. They have displaced Chinese nationals who took the top spot in 1Q2023 and for six consecutive years from 2017 to 2022, according to OrangeTee & Tie.
US citizens and the citizens and permanent residents (PRs) of Iceland, Liechtenstein, Norway and Switzerland are exempted from the 60% ABSD as these five countries have a free trade agreement (FTA) with Singapore that grants their citizens similar tax treatment as Singaporeans.
The proportion of new non-landed private home sales to foreigners (non-PRs) slid to 1.6% in July, a level not seen since May 1998 during the Asian Financial Crisis. PropNex head of research & content Wong Siew Ying attributes this record low representation to “the punitive hike in ABSD” in late April.
https://i.imgur.com/MdCAqdE.jpg
Demand in luxury market ‘has dried up’
When foreigners drove housing demand in the Core Central Region (CCR), four-bedroom units of at least 2,000 sq ft were typically the most sought-after. Penthouses and large apartments in the prime districts commanded the highest premiums on a psf basis, with demand fuelled mainly by Chinese buyers.
“Demand in that sub-segment has dried up,” says Alan Cheong, executive director of research & consultancy at Savills Singapore.
Bucking the trend was the super luxury condo Les Maisons Nassim by Hong Kong-listed Shun Tak Holdings in prime District 10 of the CCR. It accounted for four out of the top five non-landed luxury home transactions in 1H2023, with transactions ranging from $30 million to $45 million, says Edmund Tie in its 1H2023 Prestige Homes report released on Aug 16. It worked out to an equivalent of $5,050– 5,727 psf.
With two of its remaining units sold in June this year, the 14-unit Les Maisons Nassim is now fully sold. These last two units are likely to have been purchased by the same buyer, a foreigner-turned-Singapore PR, as the units are on the first and second levels of the same stack, with the options both issued on June 27, based on URA data. The 6,179 sq ft, second-floor unit was sold for $32.75 million ($5,300 psf), while the first-floor unit went for $30.76 million ($5,050 psf), based on caveats lodged, bringing the total to $63.51 million.
The already subdued luxury residential was shaken on Aug 16 when the Singapore Police Force announced that 10 people were arrested on suspicions of forgery, money laundering and resistance to lawful apprehension. The police raided multiple locations on Aug 15, including Good Class Bungalows (GCBs) along Bishopsgate, Ewart Park, Nassim Road and Third Avenue; a bungalow on Pearl Island in Sentosa Cove; and luxury condos at Leonie Hill, Paterson Hill and Tomlinson Road.
Over $1 billion worth of properties, luxury cars, cash and other assets were seized by the police. A total of 105 properties worth $831 million are reported to have been seized, including seven bungalows on Sentosa Cove and 79 condo units, of which 19 are under construction, according to the police update on Aug 18. Another 19 commercial and industrial properties were issued with the prohibition of disposal orders.
More at: https://www.edgeprop.sg/property-news/new-normal-singapore%E2%80%99s-prime-condo-market
August 31, 2023
In the wake of the property cooling measures at the end of April, Steve Tay, who founded his eponymous real estate agency in early July, saw a sharp decline in enquiries from foreigners looking to purchase homes in Singapore.
Foreign buyers are now hit with a 60% additional buyer’s stamp duty (ABSD) on all residential property purchases, double the rate from 30% before. “Many are taking a backseat and evaluating their options,” says the executive director of Steve Tay Real Estate (STRE), which focuses on luxury homes.
When the ABSD for foreigners was raised to 30% in December 2021, “we could still convince foreign buyers that Singapore is a stable investment destination, because Australia, Canada, Hong Kong and the UK had also raised taxes on foreign home buyers by a similar quantum,” says Desmond Sim, CEO of Edmund Tie.
“But at 60% ABSD, it’s a clear sign that the government doesn’t just want foreign capital to enter Singapore,” adds Sim. “They want foreigners to grow roots here and contribute more towards Singapore’s economy beyond just injection of capital.”
https://i.imgur.com/AMO64v1.jpg
https://i.imgur.com/fZqJdJo.jpg
US citizens top foreign buyers
Not surprisingly, foreign home purchases in Singapore fell in 2Q2023 after the cooling measures were implemented in April, says Christine Sun, senior vice president of research & analytics at OrangeTee & Tie, in her July 19 report. “Prices of private residential homes have also shown signs of moderation and stabilisation as more housing supply comes onstream.”
US citizens emerged as the top foreign buyers in Singapore, having purchased the most condos in 2Q2023. They have displaced Chinese nationals who took the top spot in 1Q2023 and for six consecutive years from 2017 to 2022, according to OrangeTee & Tie.
US citizens and the citizens and permanent residents (PRs) of Iceland, Liechtenstein, Norway and Switzerland are exempted from the 60% ABSD as these five countries have a free trade agreement (FTA) with Singapore that grants their citizens similar tax treatment as Singaporeans.
The proportion of new non-landed private home sales to foreigners (non-PRs) slid to 1.6% in July, a level not seen since May 1998 during the Asian Financial Crisis. PropNex head of research & content Wong Siew Ying attributes this record low representation to “the punitive hike in ABSD” in late April.
https://i.imgur.com/MdCAqdE.jpg
Demand in luxury market ‘has dried up’
When foreigners drove housing demand in the Core Central Region (CCR), four-bedroom units of at least 2,000 sq ft were typically the most sought-after. Penthouses and large apartments in the prime districts commanded the highest premiums on a psf basis, with demand fuelled mainly by Chinese buyers.
“Demand in that sub-segment has dried up,” says Alan Cheong, executive director of research & consultancy at Savills Singapore.
Bucking the trend was the super luxury condo Les Maisons Nassim by Hong Kong-listed Shun Tak Holdings in prime District 10 of the CCR. It accounted for four out of the top five non-landed luxury home transactions in 1H2023, with transactions ranging from $30 million to $45 million, says Edmund Tie in its 1H2023 Prestige Homes report released on Aug 16. It worked out to an equivalent of $5,050– 5,727 psf.
With two of its remaining units sold in June this year, the 14-unit Les Maisons Nassim is now fully sold. These last two units are likely to have been purchased by the same buyer, a foreigner-turned-Singapore PR, as the units are on the first and second levels of the same stack, with the options both issued on June 27, based on URA data. The 6,179 sq ft, second-floor unit was sold for $32.75 million ($5,300 psf), while the first-floor unit went for $30.76 million ($5,050 psf), based on caveats lodged, bringing the total to $63.51 million.
The already subdued luxury residential was shaken on Aug 16 when the Singapore Police Force announced that 10 people were arrested on suspicions of forgery, money laundering and resistance to lawful apprehension. The police raided multiple locations on Aug 15, including Good Class Bungalows (GCBs) along Bishopsgate, Ewart Park, Nassim Road and Third Avenue; a bungalow on Pearl Island in Sentosa Cove; and luxury condos at Leonie Hill, Paterson Hill and Tomlinson Road.
Over $1 billion worth of properties, luxury cars, cash and other assets were seized by the police. A total of 105 properties worth $831 million are reported to have been seized, including seven bungalows on Sentosa Cove and 79 condo units, of which 19 are under construction, according to the police update on Aug 18. Another 19 commercial and industrial properties were issued with the prohibition of disposal orders.
More at: https://www.edgeprop.sg/property-news/new-normal-singapore%E2%80%99s-prime-condo-market