LP.com

The cooling measures implemented on April 27 last year significantly impacted Singapore's high-end condominium market. These policies included doubling the Additional Buyer's Stamp Duty (ABSD) for foreign buyers from 30% to 60%, as well as adjustments to the taxes payable by Singapore citizens and permanent residents purchasing second and third residential properties. One year on, we have gained preliminary insights into the effects of these policies and prospects for the future.

According to data from the Urban Redevelopment Authority, transaction volumes by foreign buyers sharply declined after April last year. Overall, the proportion of transactions by foreign buyers in the second quarter decreased by about 22.6%, plummeting further to 1.7% and 1.5% in the subsequent third and fourth quarters, respectively. These figures indicate a significant impact on foreign demand for high-end condominiums.

Simultaneously, developers of high-end condominium projects have felt the market's instability. Some projects have been forced to sell at reduced prices due to policy effects, even resorting to "fire-sale" tactics. For instance, Cuscaden Reserve on Orchard Road and The Residences at W Singapore Sentosa Cove saw price reductions, with the former's average per square foot price decreasing by about 20%, and the latter even dropping nearly 40% below its launch price.

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On the other hand, the public housing (HDB) market has witnessed some concerning trends. Resale prices of HDB flats have been steadily rising in recent years, with several cases of exorbitant resale prices. These high-priced resale flats are not limited to "branded" projects but are prevalent across various HDB estates island-wide, raising questions about the normal functioning of the property market.

However, despite the challenges faced by the high-end condominium market, foreign buyers have not been deterred. Instead, some foreign buyers have turned their attention to the shophouse market, unaffected by policy changes. This has resulted in a surge in shophouse transactions, accompanied by substantial increases in transaction amounts.

Against this backdrop, nearly 10 high-end condominium projects located in the core central region are expected to be launched this year. These projects will encounter policy challenges but also serve as a litmus test for market resilience. As the impact of the new policies gradually unfolds, we will closely monitor changes in the high-end condominium market and their implications for the overall property market.