Home sales to foreigners dive 78 per cent

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On April 20, 2012
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Straits Times: Fri, Apr 20

HOME purchases by foreigners plummeted 78 per cent in the first quarter as the effects of the 10 per cent additional buyer’s stamp duty hit hard.

Most foreigners have retreated hastily from the market, buying just 293 homes in the first three months of the year, an analysis of caveats by Dennis Wee Group (DWG) found.

This is 78 per cent down from the 1,358 homes bought by foreigners in the fourth quarter.

Permanent residents (PRs) are not included as foreigners in these figures.

Among PRs, home purchases dipped just 7.5 per cent to 790 units, while Singaporean purchases fell 12 per cent.

Tough cooling measures unveiled on Dec 8 slapped a 10 per cent additional buyer’s stamp duty on all home purchases by foreigners. But PRs had to fork out only an extra 3 per cent on their second and subsequent home purchases.

Experts say the policy shift has caused foreigners to pull out of the market in a knee-jerk reaction as they reevaluate their options. They say some foreigners might still see long-term potential in Singapore’s property market and are attracted by rebates offered by some developers to cushion the impact of the tax, but others are simply watching and waiting.

Mr Lee Sze Teck, senior manager of research and consultancy at DWG, said he expects the number of foreigner purchases to hover at these subdued levels for the next one or two quarters.

‘Whether the foreigner market picks up again depends on prices and whether market conditions are favourable in the later part of the year. If things pick up, then they will be back because Singapore is one of the more stable countries in the region,’ he added.

Jones Lang LaSalle’s South-east Asia research head Chua Yang Liang said uncertainty in the global economy might also have taken a toll.

The new rules might have prompted more foreigners to rent instead of buy, DWG added. This could have led to median rents of private homes inching up 2 per cent in the first quarter, Mr Lee said.

Source: The Straits Times © Singapore Press Holdings Ltd

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