What the Additional Conveyance Duties holds in store for the home market

It could shift the focus of investors to other sectors.

The abrupt implementation of the Additional Conveyance Duties on March 11 has catalysed the signing of some bulk purchases of private non-landed residential units, a report from Savills Research said.

“The abrupt implementation of the ACD took the wind out of the sails of bulk purchases, but in its place, the weight of money from institutions, corporates and high net worth individuals will continue to drive the market,” it said.

This will, in turn, shift the interest of institutional investors to other sectors of the real estate.

"Unless annual prices are expected to rise significantly in the coming years, it is unlikely that institutions will return to the bulk residential sales market, as the hefty 18% stamp duty cuts deep into their required rates of return," the report said.

However, investment sales are expected to continue despite yield compression, with greater focus and weight of money now being channelled to the commercial, retail and hospitality sectors.

"As both private equity funds and ultra-high net worth individuals have either raised new money or have a need to diversify to reduce concentration risk, yields have the potential to remain low and go lower as prices will either hold firm or even edge up," Savills said.