Foreigners are still snapping up homes in Singapore despite the property cooling measures implemented by the government.
Figures on the Urban Redevelopment Authority (URA) Realis website reveal that non-PR foreigners had snapped up 637 private homes in the second quarter of this year – about 6.7% of total private home purchases. This is up from the 358 private homes they bought in the first quarter, which was about 5.4% of total sales.
Although these numbers are much lower than the quarterly average of 1369 homes bought last year, they indicate the beginnings of an upward trend after the initial drop in demand with the introduction of the Additional Buyer’s Stamp Duty (ABSD) in December 2011.
Under the new rules, non-PR foreigners have to pay a 10% tax on all homes bought, PRs pay a 3% on their second home, and Singaporeans a 3% only on their third home.
The first 4 months after the ABSD was introduced saw 369 homes being bought by foreigners, with taxes collected in the form of ABSD totalling $66.2 million.
But in the next 5 months, sales shot up. More than 1000 homes were snapped up, and the ABSD collected hit $200 million.
By the end of September this year, $450 million had been collected from the ABSD. More than half – $261 million of that came from non-PR foreigners who bought about 1400 homes in 9 months.
Experts said that although the ABSD had a short-term effect, foreigners still consider Singapore an attractive place to invest in property due to the strength of the currency and stable economy.