As Chinese buyer drops US$61m on 20 condo units, what’s fuelling Singapore’s home prices?
- Prices for private and public homes have increased, but high-profile buyers aren’t to blame, observers say, as demand exceeds supply and construction costs rise
- Property insiders say instead of even more cooling measures, the government should release more land supply to alleviate cost pressures, or legislate apartment sizes
Singapore’s move to raise taxes of up to 30 per cent on foreign buyers came just last December, but that did not stop one Chinese buyer from snapping up 20 condominium units for a staggering S$85 million (US$61.5 million).
If the buyer had Singapore citizenship – or a passport from any of the five countries, including the United States, whose free-trade agreements with Singapore allows them to pay local rates – stamp duties would have cost S$19.6 million. The buyer would have forked out S$24 million if they were a Singapore permanent resident, and S$25.8 million as a foreigner.
The slew of taxes were measures “to cool the private and public housing markets”, said a joint press release by the central bank, the finance ministry and the national development ministry in December. The government also wanted to “dampen broad-based demand” for private housing, especially from those buying property for investment rather than as homes.
Before those measures, the stamp duty for foreigners sat at 20 per cent. Financing conditions were also tightened in December.
It is unclear why the Chinese buyer bought so many units, but it is unlikely they planned to live in all of them. Prices for private homes continued to rise quarter on quarter despite the cooling measures, albeit at a much slower rate. Prices for private homes rose by 0.7 per cent in the first quarter of this year, after rising by 5 per cent in the last quarter of 2021.
