Singapore's luxury home sales have plunged by 50% in the first quarter of 2024, significantly impacted by cooling measures, increased interest rates, and reduced foreign demand. Foreign buyers, particularly Chinese investors, have decreased by a staggering 99% from the previous year, contributing to this downturn. The implementation of the Additional Buyer's Stamp Duty has been a key factor in the decline, with Sentosa Cove, a high-end residential area, experiencing all-time-low home prices. Economic uncertainties, and stricter regulations and capital controls in China, have also limited the ability of Chinese nationals to invest in overseas properties.
Singapore's luxury home sales have experienced a significant decline, with a 50% drop in the first quarter of 2024 compared to the same period in the previous year. Foreign buyers for such properties have decreased a staggering 99% from last year.
This decline is attributed to multiple factors, including cooling measures implemented by the government, higher interest rates, and reduced demand from foreign buyers.
High-end neighborhoods are being impacted such as Sentosa Cove which has recently seen all-time-low home prices, with units being sold up to 50% from their original purchase prices.
The Additional Buyer's Stamp Duty ("ABSD") is one of the most impactful government measures causing this result. Introduced specifically to cool the housing market, the ABSD imposes a significant tax on property purchases, especially on foreign purchasers who are charged 20% extra for the first home purchased and more for subsequent purchases.
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Singapore's luxury market relies heavily on big-spending Chinese purchasers. With China's economy showing significant signs of slowing the amount of foreign capital entering Singapore from China, for any purposes, is reducing. According to the Hurun Report, China saw a decline in the number of UHNWI of about 5% in 2023 due to market volatility and economic uncertainties.
Tighter credit conditions and stricter regulations on capital flight from the grasp of the CCP have further constrained the ability of wealthy Chinese nationals to invest in overseas properties.
