The number of private homes acquired by foreigners excluding PRs (permanent residents) plunged 78 percent to just 293 homes in the first quarter, from 1,358 in Q4 last year, with the additional buyer’s stamp duty (ABSD) hitting the market hard, according to caveats analysis by Dennis Wee Group (DWG).
In addition, the data showed that home purchases among PRs dropped by 7.5 percent to 790 units, while acquisitions by local buyers fell 12 percent.
The 10 percent stamp duty hike was implemented in early December 2011 on all private homes acquired by foreigners. At the same time, PRs have to pay an additional three percent on their second and subsequent home purchases.
Many experts feel the new policy has resulted in foreigners moving out of the market and re-evaluating their options. While some foreign buyers are adopting a wait-and-see approach, others see long-term potential in Singapore’s property market and are lured by the rebates and discounts offered by developers.
“Whether the foreigner market picks up again depends on prices and whether market conditions are favourable in the later part of the year,” said Lee Sze Teck, Senior Manager of Research and Consultancy at DWG.
“If things pick up, then they will be back because Singapore is one of the more stable countries in the region.”
He also expects the number of foreign purchases to be low over the coming months.
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