Foreign Home Purchases in Singapore Continue to Decline

Singapore’s property market is seeing an interesting twist. Even with a rise in wealthy residents, foreign home buyers are pulling back.

While millionaires and family offices are pouring into Singapore, they aren’t investing much in residential properties. High Additional Buyer’s Stamp Duty (ABSD) rates have discouraged foreign purchases, especially for condos. Instead, local buyers are stepping up, with many opting for rental properties. Family offices are focusing on commercial real estate, avoiding residential taxes.

This trend opens doors for local buyers and may lead to policy changes in the future.

Foreign Buyers Take a Step Back

Foreign buyers, once a key part of the market, have sharply decreased. Condo purchases by foreigners dropped from 1,054 to just 321 in the past year, thanks to the hefty 60% ABSD. Local buyers are now in the spotlight, with more choosing to rent instead of buy. The monthly average of foreign condo purchases is down to just 22 units, leaving less competition for Singaporeans to snap up homes.

Investments in 21 Anderson Condo will be interesting to such investors too.

Local Buyers Lead the Way

With foreign buyers retreating, local investors are taking the lead. More Singaporeans are choosing rental properties, and developers are responding by adjusting their projects to match local preferences. We may see more affordable housing soon, which is good news for those looking to buy.

While foreign interest in residential properties is down, the commercial property market is still attractive to global investors who want to avoid the high ABSD.

Wealth Keeps Pouring In

Even though foreign property purchases are slowing, Singapore remains a magnet for the wealthy. Some impressive numbers highlight this:

• 3,400 wealthy individuals moved to Singapore in 2023
• 244,800 millionaires now live here
• 336 centi-millionaires and 30 billionaires are residents
• Family offices surged from 400 in 2020 to 1,400 by 2023

This influx of wealth is driving other sectors, like financial services and luxury goods, even as property purchases dip.

Family Offices Shift Focus

Family offices, affected by the 65% ABSD on residential properties, are turning their attention to commercial real estate. They’re avoiding luxury homes and instead investing in office buildings and malls, where they don’t face ABSD. This shift is not just about dodging taxes but finding new opportunities in a changing market.

Competing Globally for Investors

Singapore is competing with cities like Dubai, London, New York, and Hong Kong for global investors. While our ABSD rates have driven some away, Singapore’s stability and business opportunities still attract high-net-worth individuals, particularly those setting up family offices.

Looking Ahead

Despite the current challenges, the long-term outlook for Singapore’s luxury residential market remains positive. Experts believe that regulatory changes, such as easing ABSD restrictions, could reignite foreign interest in the coming years. For now, the market is adapting, and Singapore continues to offer unique opportunities for both local buyers and international investors.