Discouraged by the high taxes in Singapore, fewer foreigners are purchasing private homes here, leaving the market to rely on local buyers, reported Reuters.
Data compiled by DTZ showed that foreigners, including permanent residents, purchased 499 homes in Q4 2015. This accounted for around 16 percent of total transactions, down from 30 percent recorded in Q3 2011 just before the introduction of the Additional Buyer’s Stamp Duty.
Acquisitions by the Chinese, considered one of the biggest foreign buyers of Singapore private homes, fell 40 percent from a year earlier to 151 units. DTZ noted that the figure is also down 80 percent from the peak in Q3 2011.
The figures were based on caveats lodged as of 15 January, with the land planning authority maintaining an online database.
“Chinese money is being attracted by Australia and the UK,” said Alan Cheong, Research Head at Savills Singapore.
He noted that the stamp duties should be rolled back to a level where the city-state can still capitalise on Chinese funds without attracting too much hot money.
“If we continue to sit by with all these measures, we are just going to miss the boat,” he said.
And with the benchmark 3-month Singapore Interbank Offered Rate (Sibor) on an uptrend, local buyers may also become cautious. The Sibor, which is used to set interest rates on mortgages, rose to 1.254 percent this week, or its highest since October 2008.