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Property Cooling Measures 2023: How are Singaporean Investors Handling the Latest ABSD Hikes?

Joanne Poh
Property Cooling Measures 2023: How are Singaporean Investors Handling the Latest ABSD Hikes?
The latest Additional Buyer’s Stamp Duty (ABSD) hikes, introduced as part of the April 2023 property cooling measures, have been successful in curbing foreign investors from buying property in Singapore. This is most evident in the decreased transaction volumes for condos in Q2 2023 by foreign buyers. But how have Singaporean investors responded?
According to the PropertyGuru Singapore Consumer Sentiment Study H2 2023, Singaporean investors are coming to terms with increased property taxes, prices, and inflation. Why is there a difference in response between Singaporean and foreign investors? Let’s find out!

April 2023 Property Cooling Measures: Foreign Buyers and Investors Respond

Effective 27 April 2023, the ABSD rates were raised most drastically for foreigners from 30% to 60%.
How this impacted foreign buyers and investors: The number of non-landed private property purchases by foreigners fell 59.2% quarter-on-quarter (QoQ) in Q2 2023, according to Urban Redevelopment Authority (URA) data.
The regions that saw the biggest QoQ drop in non-landed private property transactions made by foreigners in Q2 2023 were the Core Central Region (CCR) and Outside Central Region (OCR).
As for the Rest of Central Region (RCR), it saw the smallest QoQ dip. This was in part due to the success of major new condo launches in Q3 2023: Blossoms By The Park, The Reserve Residences, Tembusu Grand, and The Continuum.

Study: Singaporean Investors Going Ahead with Property Purchases in Spite of ABSD Hikes

Singapore Citizens buying their first property
0%
0%
Singapore Citizens buying their second property
17%
20%
Singapore Citizens buying their third and subsequent properties
25%
30%
Source: IRAS
Despite ABSD hikes for Singapore Citizens, the latest Singapore Property Sentiment Index shows that fewer Singaporeans are delaying their property purchases due to ABSD changes: 24% in H2 2023 compared to the 29% recorded in the PropertyGuru Singapore Consumer Sentiment Study H1 2023.
The number of private homeowners who do not intend to sell their current property but wish to buy another property has also remained largely unchanged, at 25% in H2 2023, down slightly from 26% in H1 2023.
In fact, among those who identify as investors, demand has actually risen, with 47% intending to purchase another property without selling their current home, up from 36% in H1 2023.

Why Are Singaporean Investors Moving Ahead with Their Property Purchase?

Dr Tan Tee Khoon, Country Manager – Singapore, PropertyGuru comments that among the investor class, there is an understanding that "property taxes are part of the ancillary costs in residential property ownership and rising inflation is temporary.
Even ABSD for multiple residential property owners is viewed as a one-time transaction cost which property seekers have to weigh in the larger scheme of property ownership, rental income, and capital appreciation. Alternatively, they could consider commercial property investments which do not attract ABSD or Seller’s Stamp Duty (SSD)."

Should I Invest in Singapore Property in 2023?

In summary, the April 2023 cooling measures have had a rather muted effect on Singaporean investors. If you’re like the majority of the Singaporean investors we surveyed and are thinking about going ahead with your property investment, remember that good financial planning is crucial.
If you need home-financing help, including choosing a mortgage, speak with a PropertyGuru Finance Mortgage Expert, who will be able to offer personalised guidance – and at no cost.
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Disclaimer: The information is provided for general information only. PropertyGuru Pte Ltd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.

More FAQs About Cooling Measures 2023

The Additional Buyer's Stamp Duty (ABSD) rates were recently revised in April 2023. Read our ABSD guide article for more details.

The Buyer's Stamp Duty (BSD) rates were revised as part of the Budget 2023 announcements. Read our BSD guide article for more details.

While there are legal ways to 'avoid' ABSD, it is important to note that tax fraud is illegal.