Developers take on ABSD burden as foreigners ‘push money elsewhere’

Following the imposition of the additional buyer’s stamp duty (ABSD) on foreign buyers in December 2011, property sales to non-Singaporean residents plummeted 75 percent, according to data by Knight Frank in an article by The New York Times.

As a result, some developers are now willing to absorb part of the stamp duty imposed on foreign buyers.

Over at Reflections at Keppel Bay, a luxury waterfront project designed by Daniel Libeskind, developer Keppel Land has offered to pay part of the tax.

“Developers who are willing to partially absorb the duty will be able to continue sales,” said Albert Foo, General Manager of Marketing at Keppel Land.

The stamp duty was introduced by the government to control sales of homes to overseas investors, in response to concerns that housing is becoming too expensive for Singaporeans.

Government leaders “clearly are saying as a policy we need to keep control of escalation in prices”, said Chris Fossick, Managing Director for Singapore and Southeast Asia, Jones Lang LaSalle.

Fossick added that the latest measures only aggravated an already quiet international sales market due to the global economic situation.

Even with the additional taxes, home values rose 0.4 percent in Q1 2012 while prices in the Core Central Region (CCR) alone grew by 0.6 percent.

However, Nicholas Holt, Research Director for Asia-Pacific at Knight Frank, expects private home prices to fall this year and added that the cooling measures will likely “push money elsewhere”.

Meanwhile, DTZ reported a 17 percent rise of international buyers in the overall market for 2011, up from 11 percent in 2005.

Source : PropertyGuru – 2012 Jul 6


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