{"id":19006,"date":"2018-07-31T04:21:18","date_gmt":"2018-07-30T20:21:18","guid":{"rendered":"https:\/\/www.99.co\/blog\/singapore\/?p=19006"},"modified":"2022-07-01T04:57:52","modified_gmt":"2022-06-30T20:57:52","slug":"luxury-properties-in-singapore-absd","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/luxury-properties-in-singapore-absd\/","title":{"rendered":"Luxury properties in Singapore: Is it game over after the ABSD hike?"},"content":{"rendered":"
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Implemented in July 2018, the latest cooling measures<\/a> have hit\u2026well, not everyone quite as hard. Genuine home buyers aren\u2019t likely to feel much impact (except for a downpayment that\u2019s five per cent higher<\/a>), and most of the pain seems reserved for investors. Along with that, the most affected segment is likely luxury properties in Singapore. Is there still hope for high-end homes? It depends\u2026<\/span><\/p>\n

Why are luxury properties in Singapore likely to be the most affected?<\/b><\/h3>\n

For the simple fact that, when it comes to Sentosa Cove bungalows or District 9 condos, the main buyers tend to be foreigners or investors. For non-landed property transactions in the Core Central Region (CCR) above $5 million, more than half of the total sales volume of 2018 have come from either foreigner or Singapore Permanent Resident buyers.<\/strong> This is in contrast for transactions below $5 million where Singaporeans make up between 60 and 75 per cent.<\/span><\/p>\n

As for investors, it\u2019s long been the case that many of the luxury properties in certain areas (e.g. Orchard, Sentosa) are bought to be rented out, rather than as homes. <\/span><\/p>\n

For foreign buyers, an increase of 5% in the Additional Buyers Stamp Duty (ABSD)<\/a> takes the tax up to 20%. That probably translates to S$1 million or more in tax, and that could cause foreign buyers to have some second thoughts; particularly when these buyers could invest in other markets like Australia, Hong Kong, etc.<\/span><\/p>\n

Investors are likewise affected. With the higher tax on second or subsequent residential properties, they may now look to other options (commercial property, stocks, etc.) <\/span><\/p>\n

As such, it\u2019s expected that buyers in the luxury property segment will adopt a \u201cwait and see\u201d approach for the immediate future.<\/span><\/p>\n

[Recommended article<\/em>: 9 reasons to buy a shophouse (instead of a condo)<\/a>]<\/p>\n

But does it spell disaster for luxury properties? Probably not.<\/b><\/h3>\n

There are still good draws for investors, who are interested in Singapore\u2019s high-end property market:<\/span><\/p>\n