Singapore's luxury housing market suffers amid money laundering scandal

Luxury housing deals in Singapore have taken a hit recently due to various factors, with the biggest being a major money-laundering scandal involving people of Chinese origin. This scandal has had a negative impact on the high-end property market in the country.
The number of high-end bungalow sales has dropped significantly, and September saw a decline in property transactions, especially for landed homes. One of the significant reasons for the slowdown in luxury property sales is the ongoing investigation into money laundering. The Singapore police have been cracking down on this issue, which has created a negative image for the luxury real estate market. As a result, potential buyers and tenants are becoming more cautious and hesitant to invest in high-end properties
In addition to the money-laundering investigations, the government has implemented higher taxes for foreign property buyers, making it more expensive for them to invest in Singapore. Rising interest rates have also made financing luxury properties more costly. Rental demand for these lavish mansions has cooled down as well. Some of these properties used to rent for as much as S$150,000 per month, but wealthy individuals are now thinking twice before committing to such expensive rental agreements. The numbers show the impact of these factors.
In 2021, there were 60 luxury property transactions amounting to S$2.1 billion in sales. In contrast, the figures for this year have dropped significantly, with only eight properties sold by the end of September. This represents an 80% decrease in sales compared to the previous year. Numbers this low haven't been seen since 2014.
Sellers, landlords, and real estate agents are taking more precautions and conducting thorough background checks on potential buyers or tenants. Some have even turned down offers from clients who might raise suspicions. For example, one landlord refused a tenant from China's Fujian province, even though the tenant was willing to pay five years' worth of rent upfront for a S$100,000-a-month home.
It's important to note that the Singapore Council for Estate Agencies advises against discriminatory or stereotyped advertising, but there are no specific laws penalizing landlords for refusing to rent their properties based on nationality or ethnicity. Potential buyers are adopting a "wait-and-see" approach as they monitor the market's pricing trends and the outcomes of ongoing investigations. They want to assess the full extent of the investigations and the penalties imposed on those involved in money laundering.

Next (CBIC announces GST for electricity charges bundled with rent)

Singapore's luxury housing market suffers amid money laundering scandal

This Month

Overview

Explore

Join Us