As the effects of the additional buyer’s stamp duty (ABSD) grow in the next few months, buying behaviour among foreign purchasers could change significantly, according to consultants.
In the case of Indonesians, the ABSD and the existing seller’s stamp duty may prove too much from an investment perspective. Despite their large budgets, it may repel Indonesian players.
According to Alan Cheong, Head of Research at Savills Singapore, the once-popular smaller format homes may also see lower take-up as their buyer base, mostly short-term investors, wears down.
Mainland Chinese, who comprise the majority of foreign buyers across the smaller home category may shift to alternative investments like retail or industrial assets and strata-titled offices, noted Cheong.
On the other hand, Lee Sze Teck, Senior Manager at DWG Research and Consultancy argues that foreigners will not shift from residential to commercial or industrial options.
“When the market eases, generally residential comes down first, followed by commercial, industrial and retail. Therefore, it is unlikely any sector would be spared a downturn. It is only the magnitude,” said Lee.
In support of this, Nicholas Mak, Executive Director at SLP International’s research and consultancy arm, believes that foreigners would not make a major switch due to their lack of familiarity with the product.
Foreigners who own Singapore residential properties would make new purchases with “unparalleled property fundamentals” or offer a price that can offset the ABSD, noted Ong Kah Seng, Director at R’ST Research.
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