If you were a city-state only slightly larger in area than the City of Toronto, you would think about space very differently. There would be no option to just sprawl further out. And that is the case for Singapore, which is approximately 734 km2 compared to Toronto's 630 km2.

So it's no wonder that Singapore carefully manages how people use and own cars. Not only were they the first country in the world to implement a congestion charge (road pricing), but they also force people to buy 10-year "Certificates of Entitlement" in order to own one.

These are auctioned off every 2 weeks and the overall supply of them is controlled by the government.

Currently, the starting price for a COE is S$104,000 (roughly the same in Canadian dollars). This is a record high and up nearly 3x compared to 2020 when fewer people wanted to own a car. However, if you'd like a COE that works on all sizes of cars, that is right now S$152,000.

It's hard to imagine a system like this ever flying in a large country like Canada. But if Canada were the size of just Toronto, you can be sure that we would likely have no other choice. That said, this is more or less how we treat new housing: we've made it difficult and expensive for new entrants.

Singapore isn't exactly saying that foreigners can't buy homes there, but it did just increase the stamp duty on purchases by foreigners to 60%. So it is saying that maybe you shouldn't do it, unless you want to pay a lot of tax.

On the other hand, if you're a foreigner with permanent residency in Singapore, the stamp duty is only 5%. But if you then want to buy a second property, the rate jumps to 30% (up from the previous rate of 25%). Companies or trusts that buy any sort of residential property also now need to pay a stamp duty of 65% (up from 35%).

The official message is that these are "pre-emptive measures" to cool demand, which I guess is mostly aimed at mainland Chinese buyers. This is the largest group. Last year, they accounted for about 25% of foreign condo purchases in Singapore. However, the total number of homes purchased by foreigners remains pretty low at just 4.7% (2022). Though first quarter data from this year does suggest the number has increased to about 7%.

Even still, how many homes is this?

Based on this information, there were 20,909 private home sales in Singapore in 2020. So let's assume this has since increased and the number is, oh I don't know, somewhere around 25,000 homes per year. At 7%, that's 1,750 homes being sold to foreigners each year. Going forward, I don't know how many people are going to be willing to pay the 60% stamp duty, but presumably some will still do it.

If we pick a random number and assume that this higher tax wipes out 80% of the foreign demand, then that's an additional 1,400 homes for locals and only 350 homes going to foreigners each year. Maybe this is something?

If you were a city-state only slightly larger in area than the City of Toronto, you would think about space very differently. There would be no option to just sprawl further out. And that is the case for Singapore, which is approximately 734 km2 compared to Toronto's 630 km2.

So it's no wonder that Singapore carefully manages how people use and own cars. Not only were they the first country in the world to implement a congestion charge (road pricing), but they also force people to buy 10-year "Certificates of Entitlement" in order to own one.

These are auctioned off every 2 weeks and the overall supply of them is controlled by the government.

Currently, the starting price for a COE is S$104,000 (roughly the same in Canadian dollars). This is a record high and up nearly 3x compared to 2020 when fewer people wanted to own a car. However, if you'd like a COE that works on all sizes of cars, that is right now S$152,000.

It's hard to imagine a system like this ever flying in a large country like Canada. But if Canada were the size of just Toronto, you can be sure that we would likely have no other choice. That said, this is more or less how we treat new housing: we've made it difficult and expensive for new entrants.

Singapore isn't exactly saying that foreigners can't buy homes there, but it did just increase the stamp duty on purchases by foreigners to 60%. So it is saying that maybe you shouldn't do it, unless you want to pay a lot of tax.

On the other hand, if you're a foreigner with permanent residency in Singapore, the stamp duty is only 5%. But if you then want to buy a second property, the rate jumps to 30% (up from the previous rate of 25%). Companies or trusts that buy any sort of residential property also now need to pay a stamp duty of 65% (up from 35%).

The official message is that these are "pre-emptive measures" to cool demand, which I guess is mostly aimed at mainland Chinese buyers. This is the largest group. Last year, they accounted for about 25% of foreign condo purchases in Singapore. However, the total number of homes purchased by foreigners remains pretty low at just 4.7% (2022). Though first quarter data from this year does suggest the number has increased to about 7%.

Even still, how many homes is this?

Based on this information, there were 20,909 private home sales in Singapore in 2020. So let's assume this has since increased and the number is, oh I don't know, somewhere around 25,000 homes per year. At 7%, that's 1,750 homes being sold to foreigners each year. Going forward, I don't know how many people are going to be willing to pay the 60% stamp duty, but presumably some will still do it.

If we pick a random number and assume that this higher tax wipes out 80% of the foreign demand, then that's an additional 1,400 homes for locals and only 350 homes going to foreigners each year. Maybe this is something?