ABSD Increased - UOB Kay Hian 2023-04-28: Faster-Than-Expected Action, But Not A Surprise

ABSD Increased - Faster-Than-Expected Action, But Not A Surprise

Singapore Property Sector - UOB Kay Hian Research | SGinvestors.ioCity Developments (SGX:C09) CAPITALAND INVESTMENT LIMITED (SGX:9CI) PROPNEX LIMITED (SGX:OYY)
  • Evidently, the cooling measures in Dec 2021 and Sep 2022 have not had the effect that the government had wanted. Resulting from the robust demand seen from local and foreign buyers, property prices have continued to increase q-o-q in 1Q23, and it would appear that the government does not want such prices to run ahead of economic fundamentals.
  • - Read this at SGinvestors.io -
  • Those not affected by the higher ABSD are Singaporean citizens and permanent residents who are first time buyers of property, with their ABSD remaining at 0% and 5% respectively. According to the government’s data from 2022, Singaporean citizens and permanent residents purchasing their first property constitute around 90% of property transactions. Thus, the material jump in ABSD is forecast to affect only 10% of residential property transactions.

Targeting the marginal buyer with deep pockets.

  • - Read this at SGinvestors.io -
  • The categories that will be most affected by these new measures are foreigners, which saw a doubling of their ABSD from 30% to 60%, and entities and trustees which now have to pay 65% ABSD vs 35% previously.
  • Note that nationals and permanent residents of Iceland, Liechtenstein, Norway or Switzerland, and nationals of the United States of America are accorded the same stamp duty treatment as Singapore citizens due to their respective free trade agreements with Singapore.

Impact on property stocks in Singapore.

  • Read more at SGinvestors.io.

Above is the excerpt from report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full report in PDF @ https://www.utrade.com.sg/.

Adrian LOH UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-04-28

More views on outlook of real estate sector:
Analyst Reports on Singapore Property Sector


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