The govt has already given sufficient warning during past 1 to 2 months. So no surprise here. 

Only today it is confirmed. They should have confirmed during budget day.

Wait for another surprise ie. increase in RPGT.

can't they just sell off the 1st house and upgrade?

Both of your posts highlight another issue on the properties.

Actually, the economy and RE market do not scare the ultra-rich to own 10 properties or speculator the properties using their own money.
If ultra-rich can buy 100 houses with cash, then let be it. It won't cause any systemic catastrophere effect even property market plunge.

The RE and economy most fear is people using leverage to "play" the properties market, which buyers do not have those kind of money in the first place, or not able to sustain from their own financial situation.
The ultimate evil is the leverage + speculative.

Speculative alone won't cause too much problem afterwards even market collapse.
It is the leverage part that can kill.

2008 financial crisis resulted from RE bubble bursting is all about leverage.

Ultra-rich can hold for years on those vacant house for years, it doesn't matter for them.
Why fire-sales the properties that bought 1 mil and sell it for 500k?
Might as well keep it like into freeze, after all, they are ultra-rich, doesn't urgent need the 500K, what if hold 10 years later on, it become 2 mil, by then only sell also not too late.