Foreign buyers of luxury condos in Singapore undeterred by high ABSD rates
Foreign buyers of luxury properties in Singapore’s prime District 9 are still undaunted by the recent hikes in additional buyer’s stamp duty (ABSD) that came into effect on April 27. Two luxury condo units were purchased by foreign buyers in the area, both with high transaction prices.
Data from the Urban Redevelopment Authority (URA) shows the purchases were made by non-permanent resident Chinese nationals.
The first property is a four-bedroom unit at New Futura, a freehold condo along Leonie Hill Road. URA data details the price at $12.5 million, at a rate of $4,645 per sq ft. This is the most expensive such sale at the 124-unit development from developer City Developments Ltd.
Based on the current ABSD rate of 60%, the Chinese buyer paid an additional $7.5 million. The total transaction price was therefore $20 million.
J’Den Capitaland is set to launch J’Den Condo, a new residential development in the Jurong Lake District (JLD). Located within a convenient distance of the vibrant amenities, the condo will provide easy access to public transportation such as the Jurong East MRT station. Located on the first and second storeys, the development will also be connected to Westgate and IMM Building via J-Walk, a covered elevated pedestrian network in the JLD. In addition, the development will be conveniently linked to the upcoming Jurong East Integrated Transport Hub, which includes a bus interchange, public library, community club and sports centre.
The seller of the unit at New Futura originally purchased it for $9.13 million in January 2018, making a gain of $3.37 million (37%) after holding the property for five years. This comes close to a previous resale transaction at New Futura that generated a gain of $2.96 million in December 2020.
The other property bought by a foreign buyer is a six-bedroom townhouse at Yong An Park, a freehold development on River Valley Road. This transaction was for $14.08 million, equating to $1,824 psf. Again, the buyer had to pay ABSD at 60% of the purchase price – in this case $8.45 million, bringing the total transaction price to $22.53 million.
The seller of the unit at Yong An Park made a gain of $4.5 million on the transaction. The unit had changed hands for $9.58 million in February 2008, a 47% capital gain after holding the property for 15 years.
Huttons senior director of research Lee Sze Teck notes that foreign interest in luxury homes has not noticeably declined despite the cooling measures and increased ABSD rate.
“The attractiveness of Singapore to foreign property buyers goes beyond the tax rate,” Sze Teck remarks. “The excellent living environment and education system, stable government and currency, ease of doing business and strong rule of law are some aspects attracting them to Singapore.”
It is clear that interest in Singapore’s luxurious residential properties is still high among foreign buyers despite the recent tax changes, as demonstrated by the two recent purchases in District 9. People come to Singapore for the security and accessibility provided by the city state’s strong rule of law and efficient means of doing business.
Cooling measures, increased taxes, and other impediments may slow the market, but don’t appear to limit foreign demand for Singapore’s luxury properties.
