The ABSD for Singapore Citizens buying a second property is now 20 per cent, and the ABSD for a third or subsequent property is 30 per cent.
ABSD rates for the first property remain unchanged for Singapore Citizens and PRs, and developers are still subject to 35 per cent ABSD.As we pointed out in the second half of last year, foreign buyers accounted for a mere 3.3 per cent of property transactions, while entities accounted for 0.4 per cent. Besides the slim numbers, there’s also the issue of which properties foreigners tend to buy.
As foreigners buy CCR condos, this is the area that will likely be most impacted by the new cooling measure; and yet, this is also the region that has seen the slowest pace of price growth. Consider that, between 2013 to 2022, prices in the CCR have grownWe can only hazard that our government knows something here that we don’t.
. In places like Ontario and British Columbia where home prices are the highest, non-Canadian residents make up less than 6 per cent of the population – so it’s not as if it’s a huge proportion there either.The biggest risk here is on owners of CCR properties. With foreigners disincentivised to buy, the prospective buyer pool may have shrunk significantly.
Note that all this is technically a negative for Executive Condominiums nearing the 11th year. With ABSD rates being sky-high for foreigners and entities, it’s no longer a huge advantage that ECs can now be sold to them. But given that few foreigners have shown interest in ECs, this is unlikely to make a huge impact.On a wider scale, the increase to 20 per cent ABSD is not expected to make a massive difference.
Almost all realtors are expecting a slowdown in the price increases, as historically buyers have switched to a wait-and-see approach after cooling measures. However, one realtor said that those expecting an actual price drop are too optimistic:
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