Mainland Chinese buyers to be most affected by the ABSD rate hike: report

In Q123, buyers from China purchased 316 non-landed homes.

Foreigners from Mainland China will be the hardest hit by the Additional Buyer Stamp Duties (ABSD) rate hike, according to OrangeTee.

In a report, OrangeTee said buyers from the Mainland will be most vulnerable to the hike given that they have always constituted the highest number of foreign and permanent resident (PR) buyers in Singapore.

In Q123, PR and non-PR buyers from China purchased 316 landed homes. 

In the luxury segment or the Core Central Region (CCR), Mainland China buyers bought 11 luxury condos or 10.8% of the 1,025 luxury condo sales during the quarter. 

Apart from homebuyers from the Mainland, OrangeTee said Malaysias is also likely to take a hit from the rate hike.

Following the hike, OrangeTee believes that more buyers from the Mainland will begin purchasing residential properties in Singapore as PRs or new citizens. 

“As a higher proportion of buyers from China (32%) purchased condos as non-PRs in Q1 2023, they could be more affected by the increased ABSD. More of such buyers may purchase properties as PRs or new citizens in future,” OrangeTee said.

The same trend will likely happen for Indonesian buyers.

The hike, on the other hand, has less impact on Indian (96%) and Malaysian buyers (98%) as most purchase condos as PRs.

“Although most US buyers are non-PRs (84%), there will be little impact as they are accorded the same stamp duty treatment as Singaporeans under the free trade agreement,” added OrangeTee.