Review of Additional Buyer's Stamp Duty

Ms Tan Su Shan asked the Minister for National Development (a) what are the measures of success for the policy on Additional Buyer's Stamp Duty; and (b) how has the policy helped the middle or low end of the housing market.

Mr Khaw Boon Wan: The Additional Buyer's Stamp Duty (ABSD) was introduced last December to moderate investment demand for private residential property and to promote a more stable and sustainable market. In particular, we introduced a higher ABSD rate for foreign buyers and companies, in view of the large pool of liquidity and strong buying interest from abroad, and the relatively small size of the Singapore market.

The ABSD, together with the earlier rounds of cooling measures and the ramp-up in both public and private housing supply, has produced encouraging results. The proportion of private residential properties bought by foreigners and companies has fallen sharply from about 20% in 2011 to 7%. Private home prices have moderated significantly, rising marginally by 0.3% in the first half of 2012 compared to the 6% increase for the whole of 2011. Short-term property speculation has also fallen sharply, as indicated by the relatively low volume of sub-sales.

These measures have helped the home buyers, including those at the middle and low end of the market. For mass market private housing outside the Central Region, prices have moderated with a slower pace of increase of 0.4% in the second quarter of 2012, compared to the 1.1% increase in the previous quarter. For the public housing market, the significant ramp-up in new flat supply has enabled most first-timers a chance to select a BTO flat if they apply for one.

These are positive signs that the market is moving towards a stable and more sustainable path. We continue to monitor the market closely, and remain ready to revise and enhance the policy, if and when the situation demands it.

Page: 318