ABSD only a temporary deterrent: consultants

Business Times: Mon, Feb 06

(SINGAPORE) The additional buyer's stamp duty (ABSD) slapped on foreigners has not stopped expatriates from looking for well-priced buys, say consultants. Said Jones Lang LaSalle's head of residential and national director Jacqueline Wong: 'International buyers are still looking to buy.' Ms Wong highlighted that though foreigners have decided to sit on the fence till the second quarter of the year awaiting further clarity, many are still keeping a sharp eye on the market for good buys, pointing to a sustained interest in local properties. But while they wait, many expatriates who come with families in tow, need a temporary place to stay. As such, key beneficiaries of this 'waiting game' are seen to be rental properties comprising private homes, serviced residences as well as long stay accommodations. In fact, some consultants have pointed out that there has been a noticeable pick-up in the rental market post-ABSD, but acknowledged that the cooling measure may not have been the sole driver. Having said that, The Club at Capella Singapore - a long stay residence situated on Sentosa island - has seen a 'slight but noticeable growth' in inquiries since the ABSD kicked in, though other factors could also be at play - such as the residence's growing brand name in the luxury long stay accommodation industry. Property agents have also noticed a pick up in rental inquiries from foreigners, especially for larger home units in well-located areas since. Even serviced residences like Pan Pacific Serviced Suites Singapore say that they are seeing faster take up rates for advance bookings after the measure. Hartaj Sewa Singh, a resident who has signed a two-year lease agreement at The Club, said that he has always been keen to invest in a property in Singapore as he is here for the long haul. But he has been deterred by headlines harping on the government's efforts to lower property prices. Mr Singh, who is also a businessman, said that he might buy a home in Singapore when the overall sentiment turns for the better. He feels that many expatriates will buy eventually if they plan to stay in Singapore for the long term. Furthermore, some developers have gone ahead to absorb part if not all of the additional stamp duty to alleviate the cost burden for foreigners, as well as dish out five-digit furniture vouchers. Speaking of ABSD, Chia Siew Chuin, director of research & advisory, Colliers International, said: 'Whether the measure will be effective in the medium to longer term will hinge upon a host of factors, including macro-economic conditions as well as the condition of property and investment market in other countries, among others.' Ms Chia highlighted that if the Singapore property market outperforms its foreign peers and maintains its reputation as a 'safe investment haven', the downside effects of the ABSD would be mitigated and in turn support buying demand. Said Chua Yang Liang, head of research at Jones Lang LaSalle: 'The market, I believe, will eventually find its balance. In the longer term this additional stamp duty will not necessarily deter those genuine foreign buyers. Long term investors local, foreigners and corporate alike, will factor this as part of the overall cost of transaction.' As such, it seems most feel that ABSD will deter foreigners from buying local properties only temporarily and not forever. Source: Business Times