SINGAPORE — With the recent cooling measures doubling the Additional Buyer’s Stamp Duty (ABSD) for foreigners and increasing it for Singaporeans and permanent residents, property analysts predict a likely jump in rental prices.
Various factors contribute to this expectation, including foreigners choosing to rent instead of buying a home, and flat owners renting before upgrading to a private property to avoid paying the duty.
Close to midnight on Wednesday (April 26), the Government announced its highest ABSD rate increase since it was first introduced in 2011. Foreigners who buy any residential property here will have to pay 60 per cent of the property’s purchase price, up from 30 per cent. Singaporeans buying their second residential property pay 20 per cent, up from 17 per cent. The changes took effect on Thursday.
In a joint statement, the Ministry of National Development, Ministry of Finance, and Monetary Authority of Singapore (MAS) highlighted growing demand for property among investors locally and internationally, stating that the cooling measures aim to “promote a sustainable property market.”
Property analysts expect housing rental charges to spike. However, some believe the increase might be muted, in line with MAS’ forecast of the rental market released on Wednesday in its macroeconomic review. MAS mentioned in its bi-annual report that growth in rental prices would dampen in the second half of the year due to an influx of new residential units potentially slowing rental demand.
As for potential private property buyers, analysts said that the latest cooling measures would not affect the sale of mass market condominiums. Most housing hunters would be first-property buyers not affected by the higher ABSD. One analyst from real estate agency PropNex Realty mentioned that its internal data suggests that only 1.5 per cent of transactions involved foreigners.
Ms Christine Sun, OrangeTee and Tie’s senior vice-president of research and analytics, said: “(Private property) sales volume will usually drop for about three to six months (after a cooling measure), but it will rebound after that.” These market shifts will “take effect immediately” after the ABSD increase, alongside a slowing growth in property prices, she added.
Historically, prices have never fallen after an increase — only when the Total Debt Servicing Ratio was adjusted, she observed. Last revised in September 2022, the Total Debt Servicing Ratio stipulates that all debt obligations, including housing loans, cannot exceed 55 per cent of a person’s income.
The higher ABSD is expected to push up rental prices for various reasons. For instance, 60 per cent is likely too high for some foreigners who may choose to rent while waiting to obtain citizenship or permanent residency — allowing them to avoid the ABSD or pay a smaller amount. This increased demand for rental housing will then drive up prices.
Mr Lee Sze Teck, senior director of research at real estate firm Huttons Asia, said: “Anecdotally, there are foreigners who rent, with an option to purchase the home once they become a permanent resident or citizen.” He estimates that rental charges will grow around 10 per cent this year.
Ms Sun also mentioned that owners of Housing and Development Board (HDB) flats may rent short-term while waiting in the period between selling their flat and buying a private property, to avoid paying the ABSD. “Some may find the upfront ABSD payment to be too high. Therefore, those who wish to upgrade may need to sell their flat then rent somewhere first, resulting in higher costs incurred.”
Ms Tricia Song, head of research for Southeast Asia at real estate firm CBRE, said that the overall rental market may be further affected in the long run. “As investment demand is likely to be altered by (the cooling measures), there could be fewer private homes for rent in the longer term. Demand could then spill over to commercial operators such as co-living or serviced apartments,” she added.
Analysts who spoke to TODAY are not expecting the latest changes to significantly impact the demand or prices of mass market condominiums. Mr Ismail Gafoor, chief executive officer of PropNex Realty, said: “The impact of the latest measures will not be evenly felt, with foreign buyers in particular taking a bigger hit. We think the impact of the ABSD rate hike on the mass market will not be significant as foreigners accounted for only 1.5 per cent of the private home purchases in the mass market in the whole of 2022.”
Another analyst agreed, saying that unlike investors who may adopt a wait-and-see approach, buyers who are primarily getting a property for their own occupation may still be active in the mass market, especially first-time buyers.
Mr Mohan Sandrasegeran, senior analyst for research and content creation at One Global Property Services, said: “Overall, affordable private properties, such as condominium units that are priced within their budget and offer desirable amenities in accessible locations, may still be in demand, albeit at a slower pace.”
However, experts had mixed views on the impact on the HDB resale market, with some predicting that there may be no significant shifts. Mr Nicholas Mak, chief research officer at property technology company Mogul.sg, said that there may be higher demand for bigger or better-located HDB flats once people ditch their plans to own and live in private housing as a result of the new changes.
Alternatively, some of these “upgraders” may delay plans, which may lead to a lower resale volume of HDB flats “for a few months,” he added.
At 2 a.m., 67-year-old farmer Zhang Jiaping wakes up, preparing to ride his motorcycle from his home in Johor Bahru, Malaysia, across the causeway to Singapore. His destination is Changi Prison; even though each visit allows only 15 minutes with his son, Zhang has made the journey every two weeks for the past decade. He arrives at a gas station opposite the prison around 3 a.m., waiting until 8 a.m. for the prison doors to open, just to catch a glimpse of his 40-year-old son, Zhang Junyan.
Zhang Jiaping’s son, Junyan, was used by a friend to smuggle heroin and was arrested on drug trafficking charges, resulting in a death sentence. The father had even gone to the President’s residence to plead on his knees for clemency, which made headlines at the time.
In 2008, Junyan smuggled heroin to earn a reward of 8,000 Malaysian Ringgit (approximately 2,411 Singapore dollars). Believing he was just helping a friend deliver goods, he was arrested by Singapore police and charged with drug trafficking. After failed appeals, Junyan was eventually spared the death penalty when Singapore revised its drug laws in 2014. His sentence was changed to life imprisonment with 15 strokes of the cane.
According to Singapore law, after serving 20 years of a life sentence, the authorities will review whether a prisoner is suitable for release. That means Junyan could potentially be released as early as 2028, counting from his arrest in 2008.
The reporter and photographer arrived at the gas station opposite the prison at 4 a.m. and saw Zhang Jiaping sitting alone on the stone steps. He greeted the reporters with a strained smile and began recounting how he has faced the long, endless wait over the years.
Zhang Jiaping told reporters that his nearly 90-year-old mother passed away five months ago. Her final wish was to see her grandson “Ah Yan” released from prison, but she left the world with regret, unable to fulfill her wish.
Reflecting on his mother’s love for her eldest grandson, Zhang Jiaping was filled with emotion. “My mother doted on Junyan the most because he was very filial to her. He always thought about what to buy for his grandmother. She insisted on seeing him not long before her passing, and I promised her I would bring her here, but she couldn’t wait for that day,” he said tearfully.
Junyan’s ordeal also directly changed Zhang Jiaping’s life. In his later years, he rents a low-cost house for 700 Ringgit (about 211 Singapore dollars) and works twice a day picking vegetables from the fields to sell at the market. His twilight years have been full of hard work and hardship.
After more than a decade, the surroundings have changed, but a father’s unwavering love remains constant. “There used to be just one big tree here, but now there are three small trees. There used to be a café next door, where I could sit and rest, but it was later demolished to build a building. I’m familiar with several employees at the gas station, who sometimes buy tea for me to drink.”
According to Zhang Jiaping, it takes about 30 minutes to ride a motorcycle from his home to Changi Prison. However, he chooses to leave at night mainly because he is older and can’t ride fast, and his motorcycle is old. He worries about collisions with other motorcycles in traffic jams, so he prefers to leave early to avoid congestion.
Even in rainy weather, Zhang Jiaping continues to visit his son. On rainy days, he wears a raincoat and rides his motorcycle cautiously and slowly. Despite being careful, the slippery roads have caused him to fall two or three times, resulting in minor injuries. But Zhang Jiaping simply smiles and says, “It’s okay; I just get back up and continue riding my motorcycle. I’ll be happy once I see my son. I miss him so much.”
With the development of society and increasing competition, more and more parents are concerned about their children’s educational prospects. Particularly during the primary one registration phase, parents use various means to secure a better learning environment and resources for their children. However, Singapore’s primary one registration system has, to some extent, exacerbated the unequal distribution of educational resources and needs to be re-examined.
The current primary one registration system takes into account factors such as parents’ background, occupation, and social status, which leads to a bias in favor of children from more privileged backgrounds. As parents, we understand and respect the efforts made by every parent to seek better educational opportunities for their children, but we are also concerned about educational equity and equality.
To ensure educational equity and equality, we suggest a comprehensive evaluation and adjustment of the primary one registration system. Firstly, the priority and admission criteria should be adjusted to focus more on students’ abilities and potential rather than overemphasizing family background. This will help to ensure that children from different family backgrounds have the opportunity to enter quality schools.
Secondly, increase support for children from low-income families by providing more scholarships and financial aid to help them access better educational opportunities. At the same time, strengthen teacher training to ensure that educational quality is not compromised by differences in schools, allowing all children to receive quality education.
Additionally, promote exchanges and cooperation between various schools to share excellent educational resources and practices. This will help to break down barriers between schools, allowing more children to benefit from quality educational resources.
In conclusion, we hope that by re-examining and adjusting the primary one registration system, educational equity and equality can be achieved. This will give every child the opportunity to showcase their talents in fair competition and contribute to Singapore’s future.
Singapore’s Ministry of Health (MOH) has issued a statement debunking claims that the Omicron XBB subvariant of the Sars-CoV-2 virus is more “toxic” than the Delta variant, is difficult to detect, and has a higher mortality rate.
No clear dominant strain On Apr. 19, the ministry posted on Facebook to explain that both international and local data show that the Omicron XBB subvariant is milder than the Delta variant, and does not have a higher mortality rate.
Current Covid-19 tests are also able to detect infections, including those caused by the XBB strains.
The ministry also stressed that out of all the various strains detected in the local community now, there is no clear dominant strain.
Neither is there evidence that any one of them causes more severe illness.
Currently experiencing Covid-19 infection wave Singapore is currently experiencing a Covid-19 infection wave, with the number of new infections reaching 26,072 last week, according to official statistics.
The number of new Covid-19 cases that require hospitalisation has also been steadily increasing over the past four weeks, reaching 522 last week.
However, MOH said in its Facebook post that ICU admissions remain stable and low, with less than 10 Covid-19 patients in ICU at any one time over the past month.
“We strongly advise the public to refer to credible sources of information. Please visit www.moh.gov.sg for the latest information on Covid-19,” said the ministry.
