Data for the first quarter of this year showed a substantial increase in the number of foreign buyers of private homes (“Foreign buyers keen on private homes again”; April 23). In absolute terms, the number of foreign purchases – 523 in the first quarter – was 40 per cent higher than the 373 recorded in the same period a year ago.
According to analysts, the additional buyer’s stamp duty (ABSD), which imposes a 15 per cent levy on purchases by foreign buyers, has prompted more of them to aim downmarket, thereby competing with average Singaporean buyers in the mass and mid-tier markets. This will drive up home prices in these segments beyond the reach of average Singaporeans.
Also, while the demand from local buyers for private homes continued to fall, that from permanent residents and foreigners remained strong and stable. This negates the objective of the Government to lower home prices.
Many foreigners buy properties for investment purposes rather than genuinely wanting to set up their homes here. The ABSD will not matter to them as many have deep pockets.
The biggest losers will be Singaporean buyers who are priced out of the market.
Deputy Prime Minister Tharman Shanmugaratnam recently said property prices remain high but are moving in the right direction, and that the Government has no plans for another round of cooling measures for now (“Home prices moving the right way: Tharman”; April 19).
But looking at the statistics, something must be done to correct the imbalance. One measure the Government could consider is to disallow foreigners from buying residential properties below a certain value, say, $2 million.
Otherwise, private property prices will continue to rise, putting such homes out of the reach of average Singaporeans.
Koh Bank Aik
* The letter was first published on ST Forum (8 May).