The tax amnesty system that was implemented in Indonesia has not caused any significant impact on the residential segment in Singapore, according to a report by Credit Suisse.
Credit Suisse observed that historically, Indonesians ranked among the top foreign prime residential property buyers in Singapore. Due to that, the introduction of TAS raised concerns that the Indonesians would sell the properties they held in Singapore to send back the assets to Indonesia, which would have caused a downward pressure on the prices of prime residential properties.
However, only S$13 billion or US$ 9.8 billion of assets have so far been repatriated, an amount that is considerably lower than the declared assets of S$251 billion or US$ 184 billion.
On the flip side, there has also been no rise in the purchasing of prime residential properties by Indonesians after TAS. Urban Redevelopment Authority data of up to September 20th shows that foreigners accounted for 610 buyers of the 1,844 in the Core Central Region with Indonesians buying 136 units.
Actually, the volume of year-to-date sales has continued to reduce, taking into account the cooling measures such as the ABSD – Additional Buyers Stamp Duty that target the foreigners.
“As a result, the total CCR sales to the foreigners on year-to-date were 33%, which corresponds with the historical averages. However, the Indonesians bought 7.4% of the sales, a figure below the 10% which is the historical average,” added Credit Suisse.
This means that the increase that new launches recorded in foreign buyers could be due to a combination of incentives and project attributes.
Cairnhill Nine is a good example where of its 215 units that were sold, 50% were to Singaporeans while Indian nationals comprising of Indonesians and Chinese shared the rest.
The Credit Suisse added that it understands that recent prime properties launches including Gramercy Park which sold 36 units and The Nassim with 10 sold units had similar profiles of buyers. The OUE Twin Peaks Tower 1 had 80% of its buyers being Singaporeans possibly due to its deferred payment plan.